SC's Argolyn Bioscience Lands $15.8M First Round

CHARLESTON, SC - Argolyn Bioscience Inc., which is developing treatments for psychosis, pain and other disorders, has raised a $15.8 million first round co-led by Intersouth Partners and Quaker BioVentures. Amgen Ventures also participated in what is one of the largest biotech deals in SC history. The company plans to use the proceeds to advance its drug candidates into human clinical tials and validated its-patented technology platform.

"Argolyn's technology has the potential to provide a real breakthough in the creation of peptide-based medicines. The company has the potential to meet real needs in the medical community," says Dennis Dougherty of Intersouth Partners. T

he deal is Intersouth's first investment in South Carolina and one of the biggest biotech deals in the state's history.

Many possible applications

Founded in 2002, Argolyn's proprietary peptide medication technology is applicable to many peptides of clinical interest and may result in drugs that are more easily administered and more effective in patients. Peptides are short proteins comprised of fewer than 40 amino acids. David Pierson of Intersouth Partners says chemist Thomas A. Dix, Argolyn's founding scientist and chief scientific officer, "stumbled onto a process for making peptides more stable and giving them greater binding affinity. Every peptide is a chemical messenger with a specific target in the body."

Pierson notes that many large pharmaceutical and biotech companies tried to make peptides more "drugable" and failed. "There is a wide number of drug opportunities if you crack the code and make them more drugable," he says.

The Argolyn technology also has promise for not only making the peptides more drugable, but may even make them orally active, which Pierson calls "the Holy Grail."

Won numerous SBIR grants

Last year the company won a $163,945 Small Business Innovation Research grant from the National Institutes of Health to aid development of its lead drug candidate for pain. "The Argolyn compound performed very well in a broad spectrum of proof-of-concept studies representing acute, chronic, and neuropathic pain. It has the potential to address a huge unmet need in the pain market," said Pearce Gilbert, president and CEO of Argolyn Bioscience, when the latest grant was awarded.

Argolyn won SBIR grants in 2003 and 2005. In 2003, The Stanley Medical Research Institute of Bethesda, MD, entered a $975,000 financing award to advance Argolyn's leading candidate for the treatment of schizophrenia. The NIH awarded Argolyn $1.35 million in 2003 to continue its development of its lead anti-psychosis drug.

"You have to jump through a lot of hoops to get those grants and in our view, they helped validate the technology platform and pre-clinical work they've performed," says Pierson, who notes that Intersouth has followed the company for several years. He says that over the last year the company "began getting very interesting clinical data."

Intersouth and Quaker decided to perform joint "exhaustive" due diligence on the company and then, to put a syndicate together, went first to Amgen Ventures, which is very experienced in the field. "We didn't have to go any further," says Pierson.

"Argolyn's is tackling some very large markets to solve medical needs," said Geeta Vemuri, Ph.D., of Quaker BioVentures. Dougherty and Vemuri will join the Argolyn Board of Directors, which will expand to five members. The company's current directors are James R. McNab Jr., W. Thomas Amick, and C. Thomas Caskey. For more see: www.argolyn.com.