12:00 AM
 | 
Mar 19, 2007
 |  BioCentury  |  Finance

Ebb & Flow

Two new companies, Tragara Pharmaceuticals and Epiphany Biosciences, landed large series A rounds last week. Each was formed around recently in-licensed compounds and hopes to get to a major value inflection point, Phase IIb results, with this initial funding.

Deals like these have consistently pushed up the size of A rounds over the last several years (see "A Trend").

Tragara, which collected $40 million, was founded in January based on an anti-inflammatory and cancer candidate, TG01, which was in-licensed from an undisclosed company. Tragara holds exclusive rights, including sub-licenses, except for a few countries in Asia and the Middle East.

TG01 is an oral treatment in Phase IIa trials for inflammation and pain, as well as preclinical testing for cancer. The company plans to move TG01 into Phase I testing in cancer by 3Q07, followed by Phase IIb trials in inflammation and pain in 2008.

The $40 million should be sufficient to get Phase II results for two or three cancer indications, specifically lung, breast and colon, Tragara board member Ralph Christoffersen of Morgenthaler Ventures told Ebb & Flow.

"The size of the round was determined by wanting to take the oncology and inflammation programs through Phase II studies," he noted. What attracted him to the deal was the "good financial syndicate, a fully fleshed-out management team, and an orally available cancer treatment."

Tragara's management was lifted en masse from cancer company Cabrellis, which was acquired by Pharmion (PHRM) for $59 million last November (see BioCentury, Nov. 20, 2006).

In addition to Morgenthaler, investors include Domain Associates, ProQuest Investments, Oxford Bioscience Partners and Mitsubishi International.

For Epiphany, the $36 million A round could mean bringing its valomaciclovir (EPB-348) shingles treatment, now at Phase IIa, through Phase IIb results. The candidate was in-licensed from Medivir (SSE:MVIR B) in September 2006 in exchange for an undisclosed equity stake in Epiphany and up to $24.5 million in milestones, plus royalties.

Epiphany is also hoping the money enables it to get its screening diagnostic for human herpes virus-8 (HHV-8) on the market to bring in some early revenue, according to Grace Yu of CDIB BioScience. The KSHV/HHV-8 gene sequence and related patents were in-licensed from Columbia University in January.

The financing was led by Wexford Capital and joined by Windsor Bay Capital and Global Trust Ventures, as well as CDIB and several private investors.

Varsity match

Investors in Oxxon last week called it a day and chose to swap the company's assets for new shares of Oxford BioMedica (LSE:OXB) worth £16 million ($31 million) at 50.36p per share. While that's less than the £21.3 million Oxxon investors put into the company, they concluded Oxxon had no future as a standalone, as it was at least 12-18 months from getting really useful...

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