BioWorld International Correspondent

PARIS - UroGene SA completed its second round of financing, raising 12 million from several venture capital funds and private investors.

The funding round was led by SGAM, the venture capital arm of Société Générale, of Paris, while GenAvent, a Paris-based joint venture between Société Générale and Aventis, of Strasbourg, and Capricorn Venture Partners, of Louvain, Belgium, also participated.

UroGene CEO Christian Grenier told BioWorld International that, while he could not disclose the amounts subscribed by each investor, SGAM is the company's largest shareholder at more than 30 percent, followed by Capricorn at about 10 percent. SGAM also participated in UroGene's 2 million round in September 2000.

Grenier pointed out that UroGene, which is based in Genopole, France's national biotechnology science and business park at Evry, has been living off the latest round for nearly a year, since there was a provisional closing in April 2002. Moreover, it is anticipating a further injection of some 1.5 million in the near future. The company is planning a third financing for next year.

UroGene initially sought to raise 10 million, Grenier explained, but in October it took over Chrysalon, a pharmaceutical chemistry company based near Lyon that was spun off by Aventis in 2000. Chrysalon had been in the process of raising funds, but after the acquisition that was scrapped and UroGene raised its target figure accordingly.

Chrysalon is now a wholly owned subsidiary of UroGene but remains an autonomous entity. It focuses on chemistry-based drug discovery and has a technology called "chemical breeding" for the discovery and optimization of drug candidates. Grenier said UroGene was screening Chrysalon's library of chemical entities to identify compounds that show biological activity in the area of urological diseases.

Chrysalon is expected to enter research collaborations in different therapeutic fields, such as central nervous system diseases and diabetes. It also undertakes fee-for-service activities that provide revenue. Grenier predicts the company will move toward profit in the near future.

That will not be the case with UroGene, however, since its research is relatively young and it will be years before it has a product on the market. It is now focusing on four programs, two of which cover prostate cancer and one on superficial tumors of bladder cancer.

To speed up the time to market its first candidates, UroGene is planning to in-license compounds in different pathologies and develop them in urological indications. Grenier said it was negotiating deals with three companies, including Aventis for a compound Aventis unsuccessfully developed for a central nervous system indication but that UroGene thinks has potential in urinary incontinence.

Grenier expects to announce an agreement by summer, pointing out that it won't be a drain on UroGene's financial resources since it should generate milestones and royalties on future sales. By in-licensing more advanced compounds, Grenier suggested UroGene might have a product in clinical development by 2005.

Meanwhile, UroGene is planning to negotiate co-development agreements with pharmaceutical companies for products coming out of its own pipeline.