ARYx Therapeutics Inc. raised $25 million in a Series C round of financing - it's largest to date - and will use the funds to continue its progress as the Volvo of the drug industry.

Using the chemistry approach of retrometabolic design to re-engineer known drugs into safer, improved versions, ARYx, of Santa Clara, Calif., now has the funds to take its compounds into the clinic.

"We'll use the funds for the advancement of our lead candidate into clinical trials, at least the lion's share of it," said Daniel Green, vice president, business development at ARYx. "Additionally, limited allocations for the funds will be to generate new discovery projects and build our existing ones."

Founded by Chairman and CEO Peter Milner and Pascal Druzgala, vice president, research and development, the company was incorporated in 1998. ARYx survived on "gentle, private cash" in its early years, about $4.5 million in total, Milner told BioWorld Today, and in his opinion, "as far as I can see, there isn't another company that is prospectively designing safety into molecules."

ARYx uses its ARYx Retrometabolic Platform to, essentially, work in reverse, Milner said. First, ARYx builds "a scaffold that is inactive, nontoxic and rapidly metabolizable," something he called an "ideal metabolite."

"Starting with the ideal metabolite, we back-engineer to the active drug," he said. "We start with a metabolite that will give no metabolic burden and work back." Milner drew comparisons between his company and the pioneering car-safety company, Volvo.

"My analogy here is to what Volvo was doing in the '70s with crumple zones in cars," he said. "[Crumple zones] didn't interfere with appearance or performance, and now everybody copies it. When we engineer drugs, it doesn't interfere with the pharmacokinetic activity."

ARYx, simply put, bypasses oxidative metabolism by putting a metabolizable center into its compounds, Milner said. But before it begins the process, it addresses three questions. Is or was the compound a billion-dollar drug before it was withdrawn from the market? Does the drug have a problem ARYx can solve with its structure? And can ARYx fit its structure into the drug? If the answers are "yes," ARYx can take on the compound. Milner estimated that ARYx can tackle between 50 percent and 60 percent of drugs with a problem.

Green said the funding should last ARYx about three years. The key, he said, to raising the funds and attracting investors in the current fiscal environment was a combination of the technology, the company's management (Milner also founded CV Therapeutics Inc., of Palo Alto, Calif.) and a desire for safer drugs in the industry.

"Our story is compelling in that safety has become a major issue with regulatory authorities," he said. "The environment has ripened for an approach that is safer."

ARYx has preclinical work in a range of therapeutic areas and expects to move into clinical trials in the next 12 to 18 months. Its first trials will focus on the cardiovascular and gastrointestinal areas, Green said.

With six employees now and the expectation to grow to about 20 in the next 12 months, there has been a change at ARYx.

"We've been spending $25,000 a month on patents for the past few years," Milner said. "It's a land race - we've been in that mode. But now we need to scale up and bring people on."

The financing was led by MPM Capital, of Boston. Co-investors in the round included OrbiMed Advisors, of New York, and Merlin BioMed Group, also of New York.