NanoMed Pharma Moves To Kalamazoo, Mich. With Series A

VENUTREWIRE

Kalamazoo, Mich. (Thursday, July 6, 2006) -- NanoMed Pharmaceuticals Inc., a developer of a nanoparticle manufacturing technology for treating patients undergoing chemotherapy, said that it has closed on a Series A preferred round of venture financing.

The sole investor in the round was the Southwest Michigan First (SWMF) Life Science Venture Fund, which invests in life science companies in the Kalamazoo, Mich. area.

With the funding, NanoMed will move its headquarters from Lexington, Ky. to the Michigan Technical Education Center in Kalamazoo, Mich. The company's laboratories will be located in the Advanced Science & Technology Commercialization Center at the University of Kentucky.

Founded in May 2000, this is the first institutional investment for NanoMed, which has been funded by seed funding and founders' investments until this point. While NanoMed President and CEO Stephen Benoit told VentureWire in August 2002 that the company was raising a Series A round, the company did not complete that funding. Benoit now cites a climate unwelcome to VC funding post-9/11 in 2002 and 2003.

NanoMed has developed a technology that allows for the drug to be trapped in solid nanoparticles. The chemical properties of the drug are then masked, aiming to prevent the patient from becoming resistant to the chemotherapy.

Benoit said NanoMed is looking to initiate clinical trials for its first candidate, Idarubicin NP, for treating patients undergoing chemotherapy for acute myelogenous leukemia, in about 18 months. The company's second candidate, Paclitaxel NP, for the treatment of metastatic breast cancer, is in preclinical development, Benoit said.

Benoit estimates the funding from the Series A round will last for more than a year. After that, the company plans to the company will look to start raising a Series B round in the next nine to 15 months, he said.

With the round, SWMF Managing Director Patrick G. Morand and Southwest Michigan Innovation Center Chief Executive Douglas R. Morton will join NanoMed's board.

Founded last summer, NanoMed is the first investment for SWMF, which currently has a total of $50 million in private equity. Of the investment in NanoMed, Morand said that half of the money will be invested at the closing, with the other half to be paid in about six to eight months dependent on milestones.

"We're interested in a broad array of life science companies, whether it is agriculture, human health or animal health," Morand said of SWMF, whose fund will spend a minimum of $500,000 and a maximum of $5 million on early stage companies. "I suspect by the time we're fully invested we will have 10 to 15 companies."

NanoMed currently has one full-time employee, with about five contract researchers through the University of Kentucky.