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Traversa Secures $5M in Series B, Nears Close of Research Deals for Delivery Technology

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Traversa Therapeutics this month closed a Series B round worth $5 million, RNAi News has learned.

The cash infusion, combined with an expected revenue stream related to the sale of research products incorporating the company's RNAi-delivery technology, is expected to give the firm enough cash to fund its planned operations through 2010, Traversa President and CEO Hans Petersen told RNAi News yesterday.

Meanwhile, Traversa continues to line up research deals with companies interested in using the technology for therapeutic RNAi applications, although none have yet matured into full-fledged technology-licensing agreements, Petersen said.

And as it prepares to seek partners for its in-house drug programs, the company is also planning to initiate a series of non-human primate studies designed to further validate its delivery approach to a big pharma audience that has begun demanding robust efficacy data earlier in the game, he added.

The delivery technology, dubbed PTD-DRBD, comprises protein transduction domains linked with a double-stranded RNA binding domain and was developed by University of California, San Diego, researcher Steven Dowdy.

According to Traversa, an siRNA coated with PTD-DRBD molecules binds to cell-surface proteoglycans, which stimulates macropinocytosis. The drug then enters the cell inside a macropinosome, at which point the pH inside the vesicle drops and the siRNA is released from the PTD-DRBD molecules into the cytoplasm.

About one year ago, when it closed a $2 million Series A financing, Traversa was largely focused on building its PTD-DRBD-manufacturing capabilities while getting the technology evaluated by as many potential partners as possible (see RNAi News, 2/7/2008).

Over 2008, the firm completed scale-up of its manufacturing and was able to generate through collaborations promising in vivo data supporting the use of the technology for ophthalmic, upper respiratory, epidermal, intraperitoneal, and spinal cord delivery, Petersen said.

The company also advanced work with Dowdy's lab at UCSD related to the use of the PTD-DRBD technology to deliver siRNAs directly into the brain for the treatment of glioblastoma, which will join metastatic ovarian cancer as Traversa's initial in-house drug-development programs, he noted this week.

Petersen said that while all of the technology-evaluation arrangements have made progress, one in particular is poised to advance into a broader research deal under which an undisclosed partner will test the technology against a number of specific ocular disease targets.

In addition, Traversa is in negotiations with two other undisclosed companies about similar deals, one for metabolic disease and one for cancer, he added.

The ocular disease deal is expected to close some time in the next two quarters, and Traversa hopes to be able to close at least one of the others before the end of the year, he added. All three deals will have one- to two-year terms and include target-specific licensing options exercisable at the partners' discretion, Petersen said.

Discussions Traversa had been holding last year with companies interested in marketing the PTD-DRBD technology as a reagent have also proven fruitful. Petersen said that Traversa has already signed a non-exclusive deal with an undisclosed firm that is expected this year to begin distributing the technology for research applications. He declined to provide additional details about that arrangement, but noted that Traversa is interested in finding additional distribution partners for the reagent market.

Importantly, both the pending research collaborations and the reagent-distribution deal will generate for Traversa revenues that, along with the $5 million just raised in the Series B, will enable the company to begin the transition from a technology platform company to a therapeutics developer.

As part of that process, the company plans to hire over the next 12 months nine new employees, including someone to lead preclinical development efforts, which will increase its headcount to 15, Petersen said. And as this team is put together, Traversa will advance its two preclinical oncology programs in earnest, with the goal of filing its first investigational new drug application by the end of 2010.

Petersen said that Traversa hopes to be able to find partners for the glioblastoma and ovarian cancer programs, but cautioned that the partnering landscape has become more difficult recently as big biotechnology and pharmaceutical companies start to ask for primate data prior to pulling the trigger on any agreements.

"We're feeling the pressure from large pharmaceutical companies to generate non-human primate data prior to a licensing agreement, in part because Alan Sachs, [vice president of RNA therapeutics and molecular profiling at Merck Research Laboratories], and other leaders in the RNAi field in large pharma are asking for it," Petersen said.

Indeed, Sachs has been one of big pharma's most vocal proponents of more rigorous data in the therapeutic RNAi space. Last September, during his keynote address at the second Drug Information Association Oligonucleotide-based Therapeutics Conference, he highlighted the shortcomings of much of the early work done with RNAi and the need for strong primate data (see RNAi News, 9/25/2008).

As such, Traversa plans to initiate this year a number of non-human primate studies examining the ability of the PTD-DRBD technology to deliver siRNAs against non-clinical-track targets in order to create a compelling data package for potential allies, he said.

One of the investors in Traversa's Series A round, Morningside Group, is also an investor in the Kunming Primate Research Center in China, he noted, and this relationship is expected to help Traversa set up contract research arrangements with the center for a variety of delivery studies.

"There have been a lot of attempts at solving the delivery problem," Petersen said. "We have a very solid solution that works locally, and perhaps can be formulated for systemic delivery. But [we are in an] environment where the large companies are asking for more solid data before moving on to bigger deals."

When it comes to discussions about licensing or partnering, having the non-human primate data "will provide us with an advantage," he said.

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