Deals round-up: VENTURE CAPITAL – TVM biotech investees to merge

HepaVec, a Berlin-based biotechnology company developing novel therapeutics for diseases of the liver, in early May received DM8 million (EURO4.1 million) of second round funding from an investor syndicate led by Techno Venture Management (TVM). Shortly afterwards, HepaVec and a second TVM investee, DeveloGen, announced their intention to merge during the course of this summer.

HepaVec, has developed new gene transfer systems, derived from baculovirus and an ovine adenovirus which enable the specific delivery of therapeutic agents into human liver cells. HepaVec’s lead product, a therapeutic for liver cancer which regulates the cell cycle to induce apoptosis (cell death) in cancer cells, is scheduled to enter phase I/II clinical trial during the course of this year.

DeveloGen focuses on the development of gene-based medicines and has established a unique integrated technology platform, DeveloScreen, incorporating cross-species animal in vivo model systems that allow the identification of novel drug development targets. DeveloGen is using genes discovered using DeveloScreen in therapeutics programmes for diabetes, obesity and liver regeneration.

The merged company, which will keep the DeveloGen name, will combine DeveloGen’s strengths in rapid gene discovery and functional genomics with HepaVec’s innovative gene delivery technology.

TVM first invested in HepaVec in 1997. The recent second round financing also involved Dansk Kapitalanlaeg and Alpinvest International – both existing HepaVec shareholders – and new investors Industrie Management Holding (IMH) and KB Lux Venture Capital Fund. To date, HepaVec has raised funds totalling DM11 million, including stille beteiligung’ and research grants.

There is considerable overlap between the shareholder bases of HepaVec and DeveloGen. DeveloGen, which raised its first funding round in the spring of 1998, is backed by TVM, Atlas Venture, Global Life Science Venture, IMH, Alpinvest, Dansk Kapitalanlaeg and TBG.