Privately held Lux Biosciences announced it has raised $50 million from current shareholders.

The Series B financing - which comprises new money as well as the conversion of an existing bridge loan - should take the New Jersey company through approval and launch preparations for its lead product, the registration-stage uveitis therapy Luveniq (oral voclosporin, LX211), according to Lux President and CEO Ulrich Grau, Ph.D. The financing was announced Oct. 19.

The round "was driven by the strong conviction that LX211 is a major asset and potentially marketing it ourselves is the way to drive the greatest value," Grau said in an interview. "There was strong consensus on the board."

That board includes representatives from Lux's major shareholders, all of whom participated in the biotech's $49 million Series A in 2006 as well as the financing just disclosed: HBM Bioventures, Novo A/S, Prospect Venture Partners, and SV Life Sciences (as well as SVLS' publicly traded fund, International Biotechnology Trust).

Lux has now raised $99 million since its founding in 2006, when it in-licensed rights to ophthalmic uses of voclosporin from the Canadian biotech Isotechnika.

But most of that money has been spent - on Luveniq and the rest of Lux's pipeline of ophthalmology drug candidates, including the Phase III Lumitect sustained release cyclosporin implant (LX201) for prevention of rejection in corneal transplant patients. Of the $50 million in new money, roughly half has gone to repay the biotech's investors who have supported the company since its Series A through bridge loans that converted into Series B shares, said Grau.

Conventional wisdom suggests that Lux's VCs were positioning the company for an acquisition which has so far eluded it. Despite intense investment by venture groups in the ophthalmology space and a few M&A highlights including the recent takeouts of ESBATech by Alcon and Fovea by Sanofi-Aventis, there have been relatively few acquisitions of ophthalmology focused biotechs Also see "Venture Eyes Ophthalmology--And Likes What It Sees" - Scrip, 1 October, 2009.).

It Takes Money To Make Money

To position the company for an exit, or a strategic partnership around Luveniq, the fundraising was a priority. "You can't just wait around without money in the bank until someone buys you," SV Life Sciences Managing Director and Lux director Lutz Giebel, Ph.D., said an interview.

"You need to stay on target, and in this case that's filing an NDA in the US and preparing for launch, and that requires money. Enough money that the people and the parties you're talking to understand that you're serious," he said. And should the right deal not materialize, at least Lux now has the wherewithal to shepherd Luveniq through FDA approval - a task that is now the firm's top priority - as well as its market launch.

Grau notes that Lux aims to file the drug with FDA and EMEA before the end of 2009. Luveniq has both orphan designation and fast track status in the US and orphan drug designation in Europe, and Lux plans to request priority review from FDA. If priority review is granted by FDA Lux is looking at a mid-2010 PDUFA date.

"Luveniq is an asset that could be marketed in the US by a relatively small sales force, in the range of about 25 reps," said Grau. "It's clearly something that can be done by a small company, and that's the focus of Lux right now."

A positive response from regulators in the U.S. or Europe would also create another important option for Lux, however. Instead of relying on a potential M&A or licensing deal, it would give the biotech the option of tapping the public markets for future funding.

Companies on the cusp of product revenues make for compelling stories for public investors, points out Giebel. The IPO window may be starting to open "and Lux would be in a perfect position for an IPO," he said. "It's a better story than a lot of the companies with Phase II data who are lining up to go public now."

- Christopher Morrison (c.morrison@elsevier.com)

Lux Bioscience Brings In $50 Million To Take Luveniq To The Finish Line Alone

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