Anadys - it's research focus neatly split - raised $38.3 million in its Series C round in what could be its last financing before testing the investment waters with an initial public offering.

Formed in 2000 through an international marriage of business leaders, industry knowledge and the vitals from Boston-based Scriptgen Pharmaceuticals, the company has raised $62.8 million in two rounds since then, including the Series C round, said its CEO and president, Kleanthis Xanthopoulos. The merger with Scriptgen in essence was Anadys' Series A financing. (See BioWorld Today, July 3, 2000.)

"We'll use the funds to further enhance our capability in discovery and take two of our compounds into the clinic next year," Xanthopoulos told BioWorld Today.

The money is expected to last two to three years, he said. Xanthopoulos said the company was originally seeking about $30 million in the round, but was able to raise more because Anadys is in the enviable position of having both a "strong discovery engine and products in preclinical development." The size of the round and the company's maturation has Anadys thinking of going public.

"Clearly this was raised as a pre-IPO round, but it depends on the markets," Xanthopoulos said. "If the markets are recipient [when we need more money], then we will be one of the premier companies to test them."

Anadys' research is split - 50 percent of the company is working on antibiotics, the other 50 percent on treating hepatitis C, using both protein and RNA targets. Its two lead compounds are ANA245/971 and ANA246. Both are for hepatitis C indications and are expected to begin human testing in 2003.

San Diego-based Anadys formed an alliance in June with Gilead Sciences Inc., of Foster City, Calif., to use Anadys' ultra-high-throughput screening Atlas technology to discover antiviral compounds. Financial details of the agreement weren't disclosed, but Anadys received an up-front payment, will receive research funding, and might see milestone payments and royalties. The work with Gilead, which Wednesday released its second-quarter earnings and reported its first profitable period, is "going very well," Xanthopoulos said. (See BioWorld Today, June 11, 2002.)

"Gilead was interested in an antibacterial target it has, but were unable to screen and identify compounds for it," he said. "It looked around and decided on Anadys. [Gilead] felt we could combine and focus on that particular target."

In February, Anadys signed a deal with Structural GenomiX Inc., also of San Diego, focused on developing antibacterial drugs. If all things go smoothly, the companies will nominate a compound to take into preclinical development in the next 24 months. From that point, it is usually nine to 12 months before the filing of an investigational new drug application, Xanthopoulos said. (See BioWorld Today, Feb. 21, 2002.)

Looking ahead, Anadys would like to file, on average, one IND in each of the next four years. That's the long-term goal. In the short term, look for Anadys to sign a deal similar in structure to the Gilead agreement before Christmas. Either way, short or long, Anadys is pleased with its position.

"We think that our RNA-based drug design will be seminal for antibacterial and antiviral new drugs," Xanthopoulos said. "We aspire to be the leader in that space."

The financing round was led by Care Capital LLC, of Princeton, N.J., and included Advent International, of Boston; Atlas Ventures, of Boston; Chinese Development Investment Bank, of Taiwan; Coastview Capital, of Thousand Oaks, Calif.; HBM BioVentures, of Zurich, Switzerland; International BioMedicine Holdings, of New York; Lotus Biosciences, of Singapore; SG Asset Management, of Paris; SG Capital Partners, of New York; Sete SA, of Geneva; Venrock Associates, of New York; and others. SG Cowen Securities Corp., of New York, acted as placement agent and Bear, Stearns, of New York, acted as co-manager.