Former Roche executive leads promising biotech startup

Addex's potential had caught investors' attention. Addex

Addex Pharmaceuticals, a Geneva-based drug discovery and development company, raised $39 million in a second round of venture capital funding.

The size of the deal makes is significant given that the startup firm is only two years old.

Investors say that the management team, their rapid progress in taking the innovation to the next stage, and the novel properties of the drugs it is developing could bring huge returns for the venture capital funds.

“The deal is good news for the Swiss biotech community,” commented Barbara Link of Ultreia Capital, based in Zurich, whose firm invests in early stage, privately owned life science firms. It does not own shares in Addex.

Addex attracted venture capital from an international group, including lead investor, TVM Techno Venture Management of Munich, Germany.

New product lines

Other investors include PolyTechnos Venture Partners of Munich, Bio*One Capital Pte Ltd of Singapore, Vinci Capital of Geneva, Initiative Capital SA of Geneva, Fulcrum Pharma Development Ltd of Hemel Hempstead, along with Index Ventures of Geneva and Sofinnova Partners of Paris.

According to Index Ventures partner Richard Rimer, when the founding team came to him with their business plan, its plan to develop so-called allosteric modulators was something quite new.

But since then Addex has become product-oriented moving rapidly to clinch a three-year clinical trial agreement with Fulcrum, it also recently licensed in a compound from CeNeS Pharmaceuticals plc of Cambridge, UK giving it two potential new product lines.

The molecules have been “validated as a major hot-spot for pharma”, said Rimer in a press announcement. Addex is “way ahead of the game”, he added.

He believes that big pharmaceutical firms are showing interest in licensing the molecules because of their potential to treat central nervous system conditions, such as schizophrenia, Alzheimer’s, and depression, without the side affects existing drugs have on the patient.

Roche connection

The company was founded by four scientists, including Vincet Mutel. Mutel, now the CEO, worked until 2001 at F.Hoffmann-La Roche Ltd, heading up the pharmacology department in central nervous system (CNS) diseases.

The startup also has two former Roche managers active on the Board. The Roche connection is reminiscent of another Swiss biotech success story, Basel-based Actelion AG, which was also venture-backed in its early stages and is now one of the top 3 biotechnology firms in Switzerland.

Addex has raised more than $51 million in venture capital funding since May 2002, including this round. Addex says it will use the capital to advance its portfolio of clinical and pre-clinical compounds.

The next milestone to watch for is a licensing agreement with a large pharmaceutical company.

by Valerie Thompson