Even amid a poor investment climate, Scion Pharmaceuticals Inc. closed a $17.5 million Series B private equity financing.

"Our scientists and our managers are all industry-experienced," President and CEO Pravin Chaturvedi told BioWorld Today. "They're all from pharma and biotech; they've done startups before and they've gotten drugs to the market - including myself. There's a track record of accomplishments [and] with that comes an understanding of the drug discovery and development process that starts at the top and runs deep in the organization."

The privately held firm, which discovers ion channel modulators, has raised $21.5 million since its September 2001 inception.

"We were oversubscribed and we raised more than we intended to," Chaturvedi said. "We turned away investors, not following the model of raising as much money as you can. We raised what we needed."

The round was led by New York-based Lehman Bros. and Lancet Capital, of Boston. Additional investors included GeneChem Therapeutics Venture Fund, of Montreal; Gray Ghost, of Baltimore; Life Sciences Partners, of Amsterdam, the Netherlands; NeuroVentures, of Charlottesville, Va.; S.R. One Ltd., of Philadelphia; as well as existing investor Oxford Bioscience Partners, of Boston.

"All our investors are life science investors; they're not mixed funds," Chaturvedi said. "We wanted to make sure our investors understood that drug discovery is a very long process."

In conjunction with the financing, Medford, Mass.-based Scion appointed a number of investment partners to its board. New members include Hingge Hsu, managing director of Lehman Bros. Private Equity Group; William Golden, managing director of Lancet; and Joachim Rothe, a partner at Life Sciences Partners.

"From the board room to the scientists, everybody is on the same page," Chaturvedi said. "We raised less now so we [can raise] more in the future, and we wanted investors who would stick with us and help us when we need more help."

The 25-person company possesses several active ion channel modulators - Scion owns 100 patents issued worldwide, 65 in the U.S. Also, the company has developed a high-throughput electrophysiology (HTEP) technology, which it pairs with its focused ion channel libraries to discover drug candidates.

"The technology we have is basically an artificially intelligent system that is designed to do electrophysiology faster," Chaturvedi said. "It's the same assay that was done in 1897, but we're doing it 100 to 1,000 times faster."

The accelerated time in which physiologically relevant data is mined potentially allows for the rapid optimization of lead compounds, he said.

"It now becomes truly enabling for us to make new small molecules because our information from the right assay is available to us sooner," Chaturvedi said.

Chaturvedi said biological information discovered as part of the Human Genome Project would aid in developing drugs for the cardiovascular or central nervous systems, the company's initial areas of focus. He said Scion plans to bring in additional knowledge through acquisitions, such as the one it made in November, when Scion acquired chemical libraries and associated intellectual property rights in the areas of sodium and calcium ion channels, as well as glutamate and sigma receptors, from Cambridge, UK-based CeNeS Pharmaceuticals Inc.

In the long-term, the company expects to apply its ion channels to other disease areas including the gastrointestinal system and kidneys, as well as for autoimmune and infectious diseases. For now, all the company's projects are in the discovery phase. Scion said it plans to advance its discovery pipeline through collaborations with pharmaceutical and biotechnology companies.

"The strategies and tactics we will put in place will be whatever is necessary to make a drug," Chaturvedi said. "We are flexible in our approach, but we are fixed in our goal - to make medicine."