Two venture capital firms, Global Life Science Ventures GmbH of Munich, Germany and Waltham, MA-based Atlas Venture, have invested $10 million to startup up a new Swiss drug development company called Nitec Pharma AG in Reinach, Switzerland.This content was published on November 12, 2004 - 18:13
Nitec is forming around an anti-inflammatory medication and the key researchers who developed it.
It is a spinout of Darmstadt-based Merck KGaA. The medication is entering phase II trials in humans and the venture capital will be used to finance these tests.
The rights for the German market will remain with Merck, but the new firm has the rights to market it elsewhere.
It was spun out because big pharma with its eye on big blockbuster drugs is not keen on spending money on developing a drug that might bring $100 million, according to Remy Hauser of Partners Group in Zug, Switzerland.
"But for a startup firm, it is a good foundation for a new business," said Remy, who manages Partners Group's biotechnology fund partnerships.
The new drug Nitec is working on can be administered orally, a result of a collaboration with Skye Pharma plc of London, UK which supplied its Geomatrix drug delivery technology.
It is the foundation for a pharmaceutical business based on developing new drugs for the treatment of pain and chronic inflammatory diseases.
Nitec aims to make drugs with a better "risk and efficiency" profile than earlier formulations, enabled by exploiting new drug delivery techniques.
It will eventually license other drug candidates from outside companies to create a pipeline of products and combine them with its drug delivery know-how.
The company founders are Dr. Achim Schäffler and Jochen Mattis, both joining from Merck. Joël Besse, a senior partner from the London-office of Atlas, and Dr. Peter Reinisch, partner at Global Life Science Ventures will take seats on the board.
Other companies that began in a similar way are Kalypsys Inc of San Diego, Calif., founded in 2002 and Speedel AG, founded in 1998 in Allschwill, Switzerland.
These two have attracted significant amounts of venture capital to further develop drug technologies originally created inside the labs of an established pharmaceutical firm, both spun out of Novartis AG.
Investors say they like to fund such ventures because there is a potentially shorter timespan to get a new drug on the market, compared to a pure research-based drug discovery company, which can take several years before it has a formulation even ready for clinical trials.
It is worth noting that venture capital firms are playing a role in bringing promising startups to Switzerland.
Besides Nitec, last month Evolva moved from Denmark to Switzerland when Aravis Venture Associates, based in Zurich provided funding for the firm October.
Similarly, venture-backed Arpida AG acquired yet another Danish startup to boost its team of researchers and add new technology to its expanding business.
by Valerie Thompson
This article was automatically imported from our old content management system. If you see any display errors, please let us know: email@example.com