Cancer-drug firm eyes Cambridge expansion

By Ross Kerber, Globe Staff, 9/8/2003

Cancer-drug development company Therion Biologics Corp. said it has received a $39 million round of venture capital funding and that it will open a new manufacturing facility in Cambridge.

The two developments reflect a string of positive trial results for Therion, whose drugs are meant to direct the immune system to fight tumors. These announcements also provide another small indication that capital is beginning to flow back into the biotechnology industry after a long hiatus.

"I'd like to think people will find this is a sign of confidence from our current investors," said Therion's chief executive, Mark Leuchtenberger. Overall, "I don't think there's any question that it looks like the clouds are beginning to part."

Talk of an improvement in the general biotechnology climate centers on nearly a dozen small companies that have registered for initial public offerings of stock. Although Therion says it is at least a year away from doing so, Michael Lytton, general partner at Oxford Bioscience Partners, a Boston-based venture capital fund, said Therion may be benefiting from rising expectations for the sector as a whole.

"When there's an IPO market, late-stage investments become more attractive," Lytton said.

Leuchtenberger said the lead investor is Hans-Werner Hector, a cofounder of German software giant SAP AG who is now a major financier and philanthropist. Other investors include the S.R. One arm of GlaxoSmithKline PLC and Hambrecht & Quist's biotechnology group, both previous backers of Therion.

Hector led a previous round of investment into Therion as well and is now its majority owner and a board member. The company had previously raised around $70 million to date, but had spent most of it on drug development and trials.

The new funds are meant to be used to fund phase 2 trials of drugs for prostate and pancreatic cancer, at hospitals including the Dana-Farber Cancer Institute. Both drugs are considered "therapeutic vaccines" based on weakened forms of pox viruses. The viruses, which contain genes extracted from tumor cells, are injected into patients. The goal is that in the course of responding to the viruses, the patients' immune system T-cells will also learn to battle the cancer.

"The search and destroy message goes out for these tumor proteins as well," Leuchtenberger said. According to a study presented in June, the company's vaccines stopped the progression of cancer in 40 percent of patients in a study group.

Currently Therion is completing a round of hiring that will increase its manufacturing base to 25 people. The company has 75 employees overall and on Wednesday will officially open a new manufacturing site at 72 Rogers St. in Cambridge. Therion has spent about $5 million to build out 5,500 square feet of space to manufacture drugs for trials, with room to double the space in coming years.

Leuchtenberger credited efforts by the administration of Massachusetts Governor Mitt Romney for helping the company to quickly obtain the permits, utility paperwork, and other requirements needed to move into the building. The governor has emphasized the development of the state's biotechnology industry for economic growth.

Barbara B. Berke, director of the state's Department of Business and Technology, said Therion's decision shows how smaller biotechnology companies can be persuaded to establish local manufacturing work as well as research facilities in Massachusetts.

Ross Kerber can be reached at kerber@globe.com.