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12:00 AM
Apr 04, 2005
 |  BioCentury  |  Finance

Ebb & Flow

TolerRx has been quietly busy since it pulled its IPO last summer. After hitting a series of milestones, the company last week announced a $30 million series D round. President and CEO Douglas Ringler said the post-money valuation is at or above that of its last private round. TolerRx wouldn’t disclose details, but it’s probably safe to assume the numbers are below the $163.8 million pre-money valuation the company was seeking in its IPO.

The public offering, which aimed to take in about $60 million, was pulled in part because of the choppy summer market. But it’s also possible that data related to TolerRx’s TRX4 anti-CD3 antibody played a part. At high doses in preclinical studies, the compound caused reactivation of a chimpanzee-specific virus similar to Epstein-Barr. In an investigator-sponsored Phase II trial in patients with Type I diabetes, many patients developed an increased level of EBV detectable in their circulation (see BioCentury, Aug. 2, 2004).

Since last August, TolerRx has done more analyses of the Phase II study of TRX4, started trials of the compound in psoriasis, and started trials of TRX1 in hemophilia A.

Although data from the Phase II study haven’t been disclosed, Stefan Ryser, general partner at Bear Stearns Health Innoventures, said the results were a primary driver of the investment. Bear Stearns Health Innoventures led the round, and Ryser joined TolerRx’s board. Other investors in the round were NIF Ventures; Skyline Ventures; HealthCare Ventures; Rho Ventures; Vertex Management; Sprout Group; Artal Services; Lehman Brothers Healthcare Fund; Yasuda Enterprise; Mizuho Capital; and Aozora Investment.

Ryser said he was not concerned about the EBV activation and that the Phase II efficacy data "are clear cut and convincing."

Ringler said both the dose and duration of TRX4 treatment are thought to play a role in activation of the virus. However, he noted that "reactivation is transient, modest and is always associated with a robust immune response against the virus, which causes the virus to go back to a state of quiescence."

This week, TolerRx was to announce a deal with Diabetogenunder which TolerRx receives access to IP and technology for the use of anti-CD3 antibodies in autoimmune diseases.

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