SEOUL - Novartis Korea Venture Fund, OrbiMed's Caduceus Asia Partners and local vaccine producer Green Cross plan to invest $6 million in the next three years to support development of PharmAbcine's fully human monoclonal antibodies to treat cancer and inflammatory diseases.

The Series A financing is co-led by Novartis Korea Venture Fund and OrbiMed.

Companies investing include two South Korean venture funds, Saehan and Tong Yang, said Green Cross spokesman Park Jun-Young.

"Of the total international syndicated investment, Green Cross, Novartis and Tong Yang are responsible for one-sixth each while OrbiMed's Caduceus Asia Partners grabbed one-third of the total," Park said in an interview.

The funds will help establish the South Korean biotech's pipeline of monoclonal antibodies and take its lead cancer mAb through Phase I clinical trials.

In October 2008, PharmAbcine was introduced to Novartis through the "Get Armed to Explore the Global Market" (GATE) business plan competition, which was organized by South Korea's Health Industry Development Institute, the Korea Trade-Investment Promotion Agency, Novartis and the Samsung Advanced Institute of Technology.

PharmAbcine Chief Executive Yoo Jin-San was quoted as saying that Novartis introduced his company to OrbiMed, which had originally targeted a $5 million investment goal for December. The bid stalled when South Korean investors became hesitant after a sharp slowdown in the global economy began last year.

"We are very excited to make the first investment by OrbiMed in a Korean company and believe that PharmAbcine is uniquely positioned with talented scientists, excellent science and meaningful product opportunities," OrbiMed's Caduceus Asia Partners Managing Director Nancy Chang said. "The company's Series A financing is a first where a Korean start-up was able to attract an international syndicate of quality investors."

The Novartis Korea Venture Fund has as its mission the goal of supporting Korea "as it builds a world-class biotech industry," said Managing Director Anja Koenig.

The Novartis Korea Venture Fund is focused on early-stage investing, and plans to invest $20 million in Korea over the next five years. The Swiss giant is looking for significant innovation, patient benefit and capital efficiency, which is clearly one of the criteria where Asia Pacific has an advantage, the company said (Also see "Life Sciences Investors Talk Shop On Asia Opportunities – Singapore Conference" - Scrip, 28 April, 2008.).

The funding is a good sign that capital may start to flow in the biotech sector again after a dry year following the economic slowdown that began last fall. VC firms predicted last October at Bio Korea that the worldwide market for biotech through initial public offers would be closed for at least a year and that other sources of money would become scarce as well.

"The IPO market is completely closed and will be closed for another year," Reinhard Ambros, executive director and head of Novartis Venture Funds, said in a presentation at Bio Korea last year (Also see "Biotech, Small Pharma IPO Market Frozen For At Least Next Year, VCs Say – Bio Korea" - Scrip, 9 October, 2008.).

Meanwhile, Novartis signed a memorandum of understanding with the South Korea Health Industry Development Institute to help promising biotech venture companies.

Analysts say the PharmAbcine deal is expected to lead to more cooperation with Novartis and Green Cross.

Green Cross had earlier signed a deal to obtain the adjuvanted A/H1N1 vaccine MF59 developed by Novartis (Also see "Novartis To Sell Flu Vaccine Adjuvant To Korea's Green Cross" - Scrip, 10 September, 2009.).

- Peter Chang (p.chang@elsevier.com)

Novartis Korea Venture Fund, OrbiMed Co-lead Series A Financing For South Korean mAb Developer PharmAbcine

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