Biolex Therapeutics, a Triangle-based biotechnology company, said Monday it has raised $60 million in new funding from private investors – an amount believed to be one of the largest rounds of venture capital ever raised by a North Carolina life science company.
N.C. venture capitalists said raising so much money is a formidable accomplishment.
“It means that the quality of their underlying science, and the perception of the market need, is there,” said Clay Thorp, a general partner at Hatteras Venture Partners in Durham. Hatteras wasn't involved in the deal.
Biolex is using the money to advance the development of Locteron, its experimental treatment for hepatitis C, and to acquire the 50 percent of commercial rights that it didn't own from its Dutch partner, OctoPlus.
The OctoPlus deal puts Biolex in the driver's seat as it seeks to maximize the drug's value, said Dale Sander, chief financial officer of Biolex.
“Just by having control over the development and the commercialization of the product allows us to retain much more flexibility,” he said.
OctoPlus has been dealing with financial woes and in July denied a report from an investor group that its survival was threatened because it was running out of cash, according to Bloomberg News.
Biolex is paying OctoPlus $11 million up-front and up to $138 million more, based on the achievement of undisclosed milestones. OctoPlus also will receive a royalty on sales if the drug wins regulatory approval and will receive an ownership stake of up to 3 percent in Biolex.
Biolex executives insisted the staggering economy had a negligible impact on the company's effort to raise new financing, which it initiated in late spring. CEO Jan Turek said venture capitalists still have money they need to invest – and Biolex had a compelling story to tell them.
“I think there are very few drug candidates today that have a multi-billion-dollar potential,” said Sander.
The active ingredient in Locteron, interferon alfa, already is used to treat hepatitis C, which can lead to liver diseases. Sales of interferon alfa are expected to exceed $5 billion a year by 2014, according to Biolex.
Biolex's version will be produced by genetically engineered duckweed, a plant commonly found in ponds. That will enable Biolex to produce the drug at a manufacturing facility that will cost “a fraction of what it would take using more traditional manufacturing methods,” said Sander.
Biolex had hoped to raise the money to develop Locteron with an initial public offering of common stock, but pulled the plug on those plans in February because of unfavorable market conditions. In July it arranged a $10.5 million loan.
Today Biolex – based in Pittsboro, west of Raleigh – has about 90 workers, down from 106 a year ago.
Biolex executives expect the $60 million in new financing will enable it to complete the second phase of Locteron's clinical trials and prepare it for the final phase necessary before seeking regulatory approval of the drug. The third phase of testing is expected to begin in late 2010.
The new funding was obtained from a consortium of venture capital funds led by two new investors: Clarus Ventures and OrbiMed Advisors.