BioWorld International Correspondent

MUNICH, Germany - Sireen AG closed its first financing round, raising €5 million from a syndicate of investors led by DVC Deutsche Venture Capital and including ABN AMRO Capital.

"We were able to find funding in a difficult market because we are playing a long game," Michael Schaeffer, CEO of Sireen, told BioWorld International. "We started to set up this round in March, and closed it seven months later. We talked with all of the significant venture capitalists in the area, and the critical point was finding a lead investor. Signing up DVC helped to bring in other partners."

Sireen, of Martinsried, is a drug development company that focuses on small-molecule inhibitors. The key items in the company's technologies are methods for selectively modifying a target protein. "This means that in addition to the chemical space, we are also examining the biological space" when seeking small molecules, he said. "We screen focused compound libraries against modified target proteins."

The company expects this approach will allow it to significantly reduce drug development times. Schaeffer added that Sireen's staff, which includes medical doctors, chemists, structural biologists and cell biologists, will give it a broader set of perspectives and a competitive advantage.

Elements of Sireen's technology platform also are available as services for other discovery companies. It has already established research and development alliances with Ascenion GmbH, of Munich, and Evotec OAI AG, of Hamburg. Other partnerships are in negotiation, but Schaeffer was not willing to disclose their names.

He said that discussions with potential investors had also been helpful in shaping the company's approach to the market. From these talks, he said it was clear that over the next several years it will be important for young biotechnology companies to have revenue streams in addition to the payments that are expected to come from drug discoveries. One result for Sireen is the company's structured biology department, which will offer high-output protein crystallization for internal use and external customers.

As the company develops its own targets and compounds, Schaeffer expects it will bring them into at least Phase I clinical testing before seeking a major partner. Depending on the indication and potential costs of Phase II trials, these could also be well within Sireen's plans. The company currently has active programs in colon cancer, leukemia and neuroregeneration.

This round of investment is sufficient to cover the company's expected operating costs for about two years. Schaeffer added that Sireen is looking to use it as a springboard for additional capitalization in the next three to four months. He is hopeful that the company will secure a second closing of up to €2 million.

Seed capital for the company, which was founded in January, came from Novartis Venture Funds and BioM AG, both of which also invested in the present round.