Signase is coming into its own with an emphasis on the Src kinase family.

By focusing on the discovery and development of inhibitors of protein tyrosine kinases, Houston-based Signase hopes to find applications not only in cancer, but also in osteoporosis, regulating immune function and central nervous system disorders.

The company was founded in 1997 but operated at the M.D. Anderson Cancer Center, using grant money to fund its research efforts, said Signase CEO David McWilliams, who came on board in May. Before Signase, McWilliams spent 10 years with Texas Biotechnology Corp., also of Houston, as its president and CEO.

"We try to create as much leverage and synergy as we can" within the Src family, McWilliams said. "Once you develop a proprietary scaffold against one family, there is enough diversity among the targets so that you can change it to come up with several targets."

The company was founded by Raymond Budde and Victor Levin. Budde moved the lab from the M.D. Anderson Center to Signase's headquarters in May, and serves the company as president and chief scientific officer. Victor Levin remains at the center but serves on the company's board of advisers and board of directors.

Signase is zeroing in on five targets, with the initial focus on an Src for cancer, which should allow for moving into other areas, McWilliams said.

"Our goal is to have our first compound into preclinical by the first quarter of next year," he said. "We are now in animal studies with Src inhibitors for cancer." If all goes as planned, Signase could be in the clinic in the first quarter of 2004.

The company has raised $6 million in the last year and a half. Although McWilliams said Signase has enough cash to take it into the first quarter of next year, he would like to secure additional financing by the end of this year.

"We're in the process of doing another financing, a Series B," McWilliams said. "We're trying to raise $16 million, which would take us through 2005."

"The goal with [the Series B] financing is to have our initial compound in Phase II, to have a backup compound, and to have all the Src family members to have compounds in biological testing," McWilliams said.

Tripos Inc., of St. Louis, a provider of discovery chemistry, integrated discovery software products and discovery research services, has a 7 percent equity investment in Signase.

"They did that by giving us services for equity," McWilliams said. "Tripos has built most of Signase's libraries for screening, and it helps us with computational screening once a hit has been identified so that we can optimize by synthesizing fewer compounds.

"We've been able to work fairly rapidly through the various steps using their resources," McWilliams said.

With the planned Series B, privately held Signase also expects to grow from its current 12-member staff to about 40 employees. But space is not an issue, since the company has 22,000 square feet at its corporate headquarters; the addition of more staff would require only a slight build-out.

"We've got to substantially increase the scientific staff to accomplish the goals we have for the Series B," he said.

Another goal is being a company that wastes little.

"We are being very rigorous in selecting hits, both in affinity and the ability to get intellectual property and the ability to scale up and synthesize," McWilliams said. "All of those add up to a business model to try to create drugs in a very efficient manner."

That efficiency is achieved by such efforts as picking targets that are related yet diverse and by developing systems of computational chemistry and optimization that are useful in a number of different areas, he said.

"I think by doing that, the investors will be rewarded," McWilliams said, ultimately either by "marrying" Signase with another company or by forming partnerships.