Novexel raises Euros 50 million in largest European biotech round for 12 months

Novexel SA put further flesh on the observation that biotechs spun out from pharmaceutical parents tend to get a better reception from venture capital investors when it raised Euros 50 million in a second round funding. The money will be devoted to the further development of its antibacterial and anti-fungal compounds.

The investment in the Paris-based company was led by new investor, Edmond de Rothschild Investment Partners of Paris and included participation from all Novexel’s existing investors, Atlas Venture, Sofinnova, Abingworth, 3i, Novo A/S and BIT, as well as other new investors, Goldman Sachs, NeoMed and NIF SMBC (Tokyo).

Novexel has four compounds in development. Iain Buchanan, Chief Executive of Novexel, said the breadth and depth of support shown by new and existing investors alike was very encouraging. “With such funds available to the company, taking us through to 2009, we will continue to invest in the pipeline and to build a company dedicated to the hospital anti-infective market.”

Novexel was spun out of Sanofi-Aventis with an advanced portfolio of anti-infective programs and intellectual property and €40 million in first round funding. The company’s assets include four compounds in formal development.

The oral streptogramin antibacterial compound, NXL103 entered a Phase I multi-dose study in October 2005. NXL101, a bacterial topoisomerase inhibitor targeting Gram-positive bacteria, entered Phase-I studies in September 2006. Novexel’s wide spectrum beta-lactamase inhibitor, NXL104 started Phase I clinical trials in December 2006, while its aminocandin anti-fungal, NXL201, is currently undergoing reformulation

Novexel holds exclusive worldwide development and commercialisation rights on all compounds in its pipeline except for NXL103 on which Sanofi-Aventis holds an option until the end of Phase IIa.