Drug maker Alios BioPharma closes Series A round

Alios BioPharma Inc., raised an additional $8 million in a Series A funding round from S.R. One six months after it began fund-raising.

Investors for the initial tranche included Novo AS, Novartis BioVenture Fund and Roche Venture Fund. The latest funding brings the Series A round total to $32 million.

The financial climate created challenges in funding, says Jack Nielsen, a partner at Novo AS, who adds that the company closed its first tranche before Christmas.

The South San Francisco-based company plans to use the funds to expand development of its compounds that treat viral diseases, such as Hepatitis C, HPV and HIV, says CEO Lawrence Blatt.

Nielsen explains that the company is trying a different method. Instead of attacking the virus, the company’s compounds help to boost the body’s defense system.

If successful, the company would provide the first “world spectrum of anti-viral drugs” on the market, Nielsen says.

Nielsen says human trials will start in the next 18 months. However, he declined to speculate when the products would come out to the market.

Blatt co-founded the company in 2006. For two years, he raised an undisclosed amount of funding from angel investors, the other co-founders of the company and executives in the biotech industry. In summer 2008, the company began to hit the road show to attract its early stage funding, which was capped off last week by S.R. One’s investment. —Martha Sanchez