News Article

Virogenomics Spin-off, Artielle ImmunoTherapeutics, Secures $11 Million Equity Financing
Date: Jun 28, 2004
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Featured firm in this article: Virogenomics Inc of Portland, OR

PORTLAND, Ore. — Virogenomics, Inc. announced today that it has spun-off its autoimmune disease technology into a new company, Artielle ImmunoTherapeutics, Inc. (Artielle), and raised $11 million in venture capital funding for Artielle. Sanderling Ventures of San Mateo, California, led the financing, joined by UV Partners of Salt Lake City, Utah, Tenex Greenhouse of Burlingame, California, and Northwest Technology Ventures of Portland, Oregon.

Artielle is a privately held autoimmune therapeutics company located in Portland. Its technology, licensed from Oregon Health & Science University (OHSU), is based on a new proprietary class of molecules known as Recombinant T cell receptor Ligands (RTLs) that can be tailored to treat a wide range of autoimmune diseases. Artielle has developed a lead compound for the treatment of multiple sclerosis, called RTL1000, which has received Orphan Drug status from the U.S. Food and Drug Administration. In addition to multiple sclerosis, Artielle is conducting research on other autoimmune diseases, such as rheumatoid arthritis, to which its platform technology is also applicable.

The proceeds from the financing will be used over an estimated three-year period to complete pre-clinical trials, manufacture RTL1000 under current Good Manufacturing Practices (cGMPs), and to complete a Phase I human clinical trial and an initial Phase II trial. Of the $11 million funding commitment, $4 million was advanced in a first closing. The remaining $7 million will be advanced in two subsequent closings upon achievement of certain specified milestones.

"This investment is a strong endorsement of our autoimmune platform technology," said Adolph J. Ferro, Ph.D., President and Chief Executive Officer. "Our animal studies are very encouraging and we look forward to initiating human clinical trials to determine the safety and efficacy of RTL 1000."

"We are delighted to be leading this Series A funding for Artielle," said Peter McWilliams, Ph.D. of Sanderling Ventures. "The RTL technology has the potential to make a significant advance in the treatment of multiple sclerosis as well as a number of other autoimmune diseases. We look forward to working with Artielle's founding scientists as well as their proven and experienced management team to build this Company."

Allan Wolfe, MD, General partner of UV Partners added, "We are enthusiastic about Artielle's technology which has shown great promise in relevant animal models of multiple sclerosis. MS is a devastating disease and the company's approach to developing therapeutics which target specific sub groups of MS sufferers is an exciting concept. We are pleased to be working with an excellent management team and proven co-investors."

"I believe that, in addition to the therapeutic implications of the science, the exciting aspect of the Artielle financing is related to leveraging intellectual capital," said Frank Ruderman, Chairman and Chief Executive Officer of Tenex Greenhouse Ventures. "The investor composition and funding structure leverages the intellectual capital of a set of experienced investors by integrating them with a seasoned science and business management to create an expanded operation and strategic management group. In my opinion, this construct significantly increases the probability of commercial success."

"Artielle is an exciting investment from a number of perspectives," said William Newman, managing director of Northwest Technology Ventures, "as its lead compound from the RTL platform will soon be in clinical trials where clinical proof-of-concept will be demonstrated; the managers and OHSU scientists have shown their ability to efficiently bring science into the clinic; and the company addresses a truly debilitating, unmet medical need."

"Virogenomics and its spin-off Artielle are superb examples of OHSU's commitment to increasingly foster technology transfer and startup industry development in the state of Oregon," said Daniel Dorsa, Ph.D., Vice President for Research of OHSU. "We are pleased that Artielle has secured a large part of its funding from out-of-state sources and will remain here in Oregon. Artielle's formation will make a positive contribution to the economy of the state as well as provide Oregonians with access to cutting-edge therapies."

The initial Board of Directors of Artielle consists of Chairman Peter McWilliams, Ph.D. of Sanderling Ventures; Allan M. Wolfe, M.D., of UV Partners; Frank Ruderman of Tenex Greenhouse; Shahab Fatheazam, Managing Director at Vector Securities International of Deerfield, Illinois, and Adolph J. Ferro, Ph.D., President and Chief Executive Officer of the Company.

In addition to Dr. Ferro, officers of the Company include Gilbert N. Miller, Executive Vice President, Chief Financial Officer and Secretary and Andrew S. Goldstein, Vice President of Product Development. Arthur Vandenbark, Ph.D., Gregory Burrows, Ph.D. and Halina Offner, Ph.D., the OHSU Scientists who discovered the technology will serve as consultants to the Company.

• Autoimmune diseases

Autoimmune diseases comprise more than 80 distinct diseases and syndromes, and affect about 20% of the population in Europe and North America, with two thirds of patients being female. Examples of autoimmune diseases include multiple sclerosis (MS), rheumatoid arthritis, systemic lupus erythematosus, celiac disease, Crohn's disease, Grave's disease and type 1 diabetes. MS typically presents between the ages of 20 to 40, and is the second most common cause of neurological disability in patients under 65. The disease involves repeated episodes of inflammation of nervous tissue and progresses at varying rates per person. As patients progress, they become increasingly disabled; typical symptoms include loss of motor function, pain, fatigue, etc. There is no fully effective prevention or cure for MS. Current treatments are aimed at controlling symptoms and maintaining function to give maximum quality of life.

• The Investors

Sanderling Ventures is among the oldest investment firms dedicated to building new biomedical companies. Sanderling emphasizes early-stage financing and active management of its portfolio companies. Since its inception in 1979, Sanderling has supported over 40 biomedical companies from very early stages through commercial development.

UV Partners, established in 1986, with offices in Salt Lake City and Los Angeles, is a leading early stage private equity investment group. UV Partners provides the foundation for the development of early-stage entrepreneurial concepts into tomorrow's industry-leading Information Technology and Life Science companies. The partners possess diverse but highly complementary industry and investment backgrounds. They share a hands-on approach and work collaboratively on each portfolio company over the life of the investment thereby providing each management team with a broad range of resources, experience and knowledge.

Tenex Greenhouse Ventures, founded in 2001, invests in early-stage life science businesses, adding value through access to a vast network of knowledgeable professionals.

Northwest Technology Ventures is a formation-stage venture fund based in Portland, Oregon. NTV undertakes seed and early-stage investments in Oregon with a specific focus on opportunities arising from the state's public and private universities, research institutions, and corporate research laboratories.

• Virogenomics

Virogenomics, Inc. is an Oregon-based biotechnology company founded by Oregon Life Sciences LLC to identify and obtain rights to outstanding early-stage technologies, develop these technologies to a critical phase, and to spin-off these developed technologies into new start-up companies. Artielle is the first such spin-off. In addition to the autoimmune technology, Virogenomics is working to develop technologies from OHSU in the areas of cancer, stroke, cardiovascular disease and antiviral diseases. OHSU is a shareholder of Virogenomics and receives funding from Virogenomics to support research. OHSU is also entitled to receive milestone payments, royalties and a share of sublicense fees on any products commercialized as a result of these technologies.