Durham drug-development company Argos Therapeutics, which last month withdrew its plans to raise money with an initial public offering of stock in the wake of a lackluster market, has rebounded by raising $25 million in venture capital funding.
The companys successful implementation of its backup plan gives it the necessary cash to launch a Phase 3 trial of its experimental drug for treating kidney cancer and hire an additional 20 to 25 employees over the next nine months or so, said CEO Jeff Abbey.
Thats the best news locally, thats for sure, Abbey said of the hiring plans.
Argos, which currently has 57 employees, plans to announce Tuesday that it has raised a new round of funding led by Europe-based Forbion Capital. The companys existing investors, including Triangle venture capital funds Intersouth Partners and Aurora Funds, participated in the funding. The new $25 million in financing boosts the total amount the company has raised from outside investors to $114 million.
Were lucky to have such supportive investors who have supported the company over a long period of time and continue to be excited about our prospects, Abbey said.
The funding contrasts with an overall dry spell for emerging Triangle companies that depend on venture capital to develop their technology or ramp up marketing. Argos haul is double the $11.8 million in venture capital raised by four Triangle companies in the first quarter and is the single largest VC round locally since Ascletis, a start-up pharmaceutical company with operations in the Triangle and China, raised $50 million in early April 2011, according to data released by PricewaterhouseCoopers and the National Venture Capital Association and compiled by Thomson Reuters.
Phil Tracy, a venture capitalist with Intersouth and a member of Argos board of directors, said the companys very strong results in Phase 2 tests of its kidney cancer treatment and its strong management team inspired confidence among the investors.
We continue to be enthusiastic about the technology, he said. We were more than willing to step up and do our part to continue funding the company.
In February, Argos reported that a Phase 2 study of its kidney cancer treatment found that 21 patients who would be expected to survive an average of about 14 months instead survived for 29.3 months on the drug. The treatment also recently was granted fast-track status by the Food and Drug Administration, which qualifies it for expedited review once the company applies for approval to market the drug.
The new funding was essential for Argos because it was cash poor and has no products on the market to bring in revenue. With just $2 million in cash as of Dec. 31, there was substantial doubt about our ability to continue as a going concern without an infusion of cash, the company previously reported in a filing with the Securities and Exchange Commission.
Argos had hoped to raise about $75 million in cash with an IPO, which would have been sufficient to see its Phase 3 trials through completion. Raising one-third that amount from private investors will see the company through the middle of next year, at which time it will need to raise another $50 million. That money could come from private investors, going public or by teaming up with a larger corporate partner willing to fund its drug-development effort, Abbey said.
Abbey said that by the time the company needs additional funding, it should have interim results from a portion of its Phase 3 trial that, if all goes well, will bolster its ability to attract new capital.
Under the companys current timetable, it could file for regulatory approval to market the drug as early as late 2015 or early 2016. Argos also is conducting a Phase 2B trial of an experimental HIV treatment whose development is being supported by $34 million in funding from the National Institutes of Health.