Ceregene Partners With Genzyme, Inks $28M Series C
June 22, 2007 - VentureWire Life Science
By Lorie Konish
Gene therapy developer Ceregene Inc. said it has raised $28 million in Series C funding and formed a partnership with Genzyme Corp. that includes a $25 million upfront payment for its lead Parkinson's disease treatment.
Under the terms of the partnership, Genzyme will pay the $25 million to Ceregene, while Ceregene will also be entitled to as much as $125 million for development-related milestones and reimbursement for 50% of the Phase III worldwide development costs. Ceregene will retain exclusive rights to the drug in the U.S. and Canada, while Genzyme will have rights for the rest of the world. Genzyme will also pay tiered royalties to Ceregene for sales where it has rights to the product.
At the same time, Ceregene has raised $28.1 million toward an open Series C round. For the funding, Ceregene has brought on new lead investor Investor Growth Capital, as well as existing investors Alta Partners, California Technology Ventures, Hamilton Bioventures, MPM Capital and Cell Genesys. The Series C round, which may have one more closing, Ceregene President and Chief Executive Jeffrey M. Ostrove said, was scaled back from an initial $40 million to $45 million target because of the additional funding from the partnership.
"We had multiple term sheets. We scaled it back because of this," Ostrove said of the Series C fund-raising. "We felt it was extremely successful."
The partnership with Genzyme is for Ceregene's lead compound, CERE-120, targeting Parkinson's disease, which is currently in Phase II trials. Ceregene is using its proprietary AAV2-based technology to develop gene therapies targeting neurodegenerative disorders. The technology works by taking a small virus, deleting all of its viral genes and replacing it with nurturing gene expressions. Once the genes are inside the nucleus of the cell, a growth factor is produced and secreted out of the nerves, reaching the surrounding cells to keep them alive and functioning. Ceregene uses this technology and various growth factors to target other diseases, including Alzheimer's disease, Amyotrophic Lateral Sclerosis, or ALS, Huntington's disease, retinitis pigmentosa, macular degeneration and glaucoma.
Ceregene will be looking forward to certain upcoming goals, Ostrove said, including the beginning of the Phase II trials in Alzheimer's early next year, the reporting of the Phase II data from the Parkinson's trial in the fall of 2008 and preparing for a Phase III trial for that lead Parkinson's candidate.
Genzyme has been working in the gene therapy space since the early 1990's, company spokeswoman Erin Emlock said. The company also has its own gene therapy Parkinson's targeted treatment in Phase I/II development
Genzyme also currently has another gene therapy partnership with venture-backed Applied Genetics Technologies Corp. for an age related macular degeneration indication. Applied Genetics is backed by Intersouth Partners, InterWest Partners, MedImmune, Skyline Ventures and PrimeBio Tech, VentureWire records show.
Founded in 2001, San Diego-based Ceregene has raised $42.5 million to date in venture funding. The company has also raised almost $2.7 million through grants through the Michael J. Fox Foundation for its Parkinson's work.