BioWorld International Correspondent

LONDON - Renovo Ltd. raised £21 million in a second round funding that should enable it to take two compounds, one for accelerating wound healing and one for preventing scarring, to the end of Phase II studies, and to put another four compounds into Phase I testing.

Mark Ferguson, Renovo CEO, told BioWorld International, "We set out to raise £21 million [US$33 million] and we had a lot of interest, so it was oversubscribed."

It is one of the biggest rounds by a European biotechnology company this year and was led by HealthCap, with Care Capital LLC, Atlas Venture and JPMorgan Partners also participating. Jerry Karabelas of Care Capital and Carl-Johan Dalsgaard of HealthCap are joining the board of Manchester-based Renovo.

Renovo's products are based on Ferguson's observation that if embryos are operated on in utero, the wound heals without scarring. From his research, carried out when Ferguson was head of the School of Biological Sciences at Manchester University, Renovo has discovered compounds - both small molecules and recombinant proteins - that exploit the molecular mechanisms involved in scar prevention and wound healing. The company has 300 granted patents and patent applications based on Ferguson's research.

The company obtained proof of efficacy for its lead product, RN1, an anti-scarring drug, in a Phase I safety trial involving volunteers who were having elective surgery.

"The findings are very significant, but we haven't released details because the results will be published in a scientific journal," Ferguson said. RN1 is now in a Phase II study in 200 to 300 patients who are either having skin grafts following burns or undergoing breast reconstruction surgery.

The second compound, RN2, for wound healing, has completed Phase I testing and now will go into a Phase II study involving 100 to 200 patients suffering from chronic venous ulcers.

The funding also should allow Renovo to bring four further compounds - three for preventing scars and one for accelerating healing of chronic wounds - into Phase I work.

"These are all based on different mechanisms of action," said Ferguson. "It is very important that we build contingency into the pipeline."

All the company's work to date is on skin, but Ferguson expects the compounds to work against scarring at all body sites, including the eye, and to prevent adhesions after surgery. "We are working with small molecules and proteins, but we expect small molecules to be better in systemic applications," he said.

Renovo has used a pharmacogenomic approach from its inception, and Ferguson said there is evidence of genetic predisposition to scarring, meaning that in the future it might be appropriate to test patients to enable selection of the most appropriate treatment.

Scarring also is a paradigm for fibrotic diseases, and Ferguson said this is an area the company might move into at a later date.

Renovo was founded in October 2000 with first round funding of £8 million. The company previously said it intended to partner products at the end of Phase II, but Ferguson said the data obtained thus far is so strong that this could change. "Nothing is partnered, and since the evidence is they work very well, we will wait as long as possible. We will talk to anyone, but these are very efficacious [compounds] and we are prepared to finance further trials ourselves."

The round of funding will last two to three years, and Ferguson said at present he has an open mind on whether the company will then do an initial public offering or conduct another private round.

"The aim is to have a very strong company with products at IPO," he said.