Monday, July 9, 2007

Ancora anchors drug plans with $2.2M in VC

By Ryan McBride

Since winning a high-profile business plan contest at MIT five years ago, Ancora Pharmaceuticals Inc. has kept a low profile as it tries to redo the way lucrative carbohydrate-based drugs are made.

Keeping to its stealthy ways, the Medford startup quietly closed a $2.2 million Series B round in recent weeks to further develop technology to synthesize carbohydrates, according to a U.S. Securities and Exchange Commission filing, and the company's president.

Ancora aims to assemble carbohydrate-based drugs by synthesis, as an alternative to current methods of refining large amounts of biological materials to produce such treatments, said John Pena, president of the company. If the firm succeeds, the technology could alter methods of producing blockbuster treatments made by drug giants such as Wyeth and Sanofi-Aventis SA.

"That's what we have focused on," said Pena. "How do you make synthesizing carbohydrates faster and more cost effective?"

The infusion of cash will also support development of Ancora's own carbohydrate-based drugs. The company is in preliminary studies of treatments for malaria and tuberculosis.

The company's drug-making technology could someday be plugged into a multibillion-dollar market for carbohydrate treatments such as the blood-thinner Lovenox, said Pena.

Lovenox netted its Paris-based maker, Sanofi-Aventis, $2.9 billion last year from sales in the United States and Europe, representing about 10 percent of the firm's $29.5 billion in total revenue last year.

Similarly, Madison, N.J.-based Wyeth made nearly 10 percent of its $20.4 billion in 2006 revenue from nearly $2 billion in sales of carbohydrate-based bacterial vaccine Prevnar, the company said in its annual report.

At Ancora, a startup with fewer than 20 employees, company officials have supported the 5-year-old operation in large part with federal dollars, including a $1.9 million grant from the National Institutes of Standards and Technology in 2003, and a $3.3 million grant from the National Institutes of Health in 2005 to develop a malaria vaccine, the company's president said.

Pena declined to reveal how much was raised in the company's Series A funding from angel investors in 2003. He did say that the latest round was the company's first institutional investment. It included New York-based VC firm Harris & Harris Group Inc. and a second firm that he declined to reveal.

Harris & Harris CEO Douglas Jamison has joined Ancora's board of directors, which is chaired by Karl White, the former head of the Massachusetts Bay Transportation Authority Retirement Fund, and Carmichael Roberts, a local life sciences veteran who also serves on the board of Cambridge nanotechnology firm Nano-Terra Inc.

With the infusion of new capital, Ancora will focus on making its process of assembling carbohydrates cheaper and faster in order to be able to produce treatments in large enough batches to serve the multibillion-dollar marketplace, Pena said.

The firm's technology was invented by board member Peter Seeberger, a former professor of chemistry at MIT who in recent years took a faculty post at the Swiss Federal Institute of Technology in Zurich, Switzerland.