Drug delivery company Altea Therapeutics raised $17 million in a Series B round of financing, money that in part will be used to move into Phase I trials.

"We clearly had a need for cash to fund the clinical development of our two lead products and we had to date been funded through a mixture of venture capital, corporate partnerships and angel money from the founding group," said Eric Tomlinson, CEO of Atlanta-based Altea. "We'd grown to 25 people and had seen some early development of our products, but needed the financing to get into some professional trials."

The round was led by Domain Associates, of Princeton, N.J., and Venrock Associates, of New York. Also participating was vSpring Capital, of Salt Lake City. Tomlinson said Altea's chance for quick returns helped attract investors.

"From their viewpoint, they liked our strategy of working with drugs already approved," he told BioWorld Today. "The approval means we have the potential to move our products quickly and smoothly through development and to market."

Tomlinson is new to Altea, having just been named its CEO. His previous experience includes leading the advanced drug delivery research program for Ciba-Geigy Pharmaceuticals and being CEO of GeneMedicine Inc., of The Woodlands, Texas.

"I've known [Altea's] founders for 20 years," Tomlinson said. "As they progressed, I was aware of that. Several months ago, one of the founders said they were looking for a CEO who would be based where the operations were. I said, If you're interested, I'm interested.'"

Altea was interested, and Tomlinson came on board.

The company's technology is designed to deliver therapeutics through the skin noninvasively by a method known as "skin microporation." Tomlinson said the technology works by "applying energy across the skin in a controlled fashion." Those pulses of energy open channels in the dead layer of skin, allowing the drug to travel across the dermis via the bodily fluids beneath one's outermost protection.

Altea's lead products are a basal insulin patch and an opiate-based analgesic patch. The company has not yet moved to Phase I, but Tomlinson said the company has conducted clinical trials under institutional review board approval. Altea expects to be able to announce the outcome of clinical conversations with the FDA in the next several months. Tomlinson said the technology is "broadly applicable" and said that "many drugs lend themselves to being delivered by our technology," including polypeptides, antisense drugs and low-molecular-weight products. Altea also is interested in delivering vaccines.

The financing, Tomlinson said, should "last two to three years at the rate that we plan to spend it." The company will allocate about 80 percent to product development and 20 percent to product exploration. But, he said, "There's no doubt we'll need more money."

Altea will start to look for that money in about 18 months, and it could come in the form of another financing or through corporate partnering.

"We are a partnering company and we see significant need to leverage partnerships to develop our products," Tomlinson said.

As the company gets closer to, and eventually into, the clinic, Altea will increase its work force - it expects to have 40 employees by the end of 2003. Besides allowing the progress of products, the financing is pleasing to Altea because of what it says about the company.

"There is money and there is money," Tomlinson said. "This is a high-quality investment by two investors that have a stellar track record. The quality of this investment is what is so appealing to us."