The private financing is the second-largest investment in a Seattle biotech company this year, behind the $32 million infusion for Trubion Pharmaceuticals in July.
Other than one investor from Singapore, the money is coming entirely from Japanese investors, including the biotech arm of Softbank, a well-known technology investor.
The 2-year-old company is led by Dr. Ryo Kubota, a 38-year-old ophthalmologist from Japan who made his name there by discovering one of the genes linked to glaucoma. He was recruited to the University of Washington in 1999 to do adult stem-cell research aimed at regenerating damaged retinas.
While at the UW, Kubota said, he realized the line of research may not pay off with new therapies "in my lifetime." But he discovered something that could be useful sooner, a method to keep animal nerve cells alive in a petri dish for six months instead of a few days.
Kubota, whose company has licensed the technology from the UW, said it could enable researchers to better determine in animal testing if a drug has potential or not.
Acucela (ack-you-cell-uh) is using the technology to test drugs against the "dry" form of macular degeneration, which affects about 8 million to 9 million Americans; and glaucoma, which afflicts about 3 million. The money should sustain the company's efforts for two to three years, and Acucela plans to hire about five people.
Animal tests key
If animal tests pan out, the company could deliver two new compounds into human clinical testing, then raise more money, Kubota said.
The ultimate goal is to create a pill or a new eye drop for the "dry" form of macular degeneration.
That condition occurs when small yellow deposits form in the eye that can damage central vision, making it harder to read or drive. It has no effective treatment, though studies show high-dose vitamins may help stave it off.
If Acucela succeeds with a treatment, it would be trailblazing work. There isn't even a standard model for animal testing of a drug for the disease, much less a clear path of human testing.
"We'd like to do something nobody has ever done before," Kubota said. "I want to do something good for blindness; it's my dream."
Many well-known companies, including Eyetech Pharmaceuticals, Pfizer, Genentech and Novartis, are hotly pursuing treatments for the more severe, but less common, "wet" form of macular degeneration, where blood vessels can leak into the retina and damage vision.
Robert Nelsen, managing director of Arch Venture Partners, the most active biotechnology investor in Seattle, said some biotech startups are focusing on the dry form but none is in the late stages of development.
The number of cases of macular degeneration is expected to soar over the next 20 years as baby boomers age.
"If something were to work in the dry form, it would be a very big deal," Nelsen said. "The devil is always in the details, but it sounds interesting."
The company's scientific advisory board is made up of Kubota's contacts from the UW in ophthalmology, cell biology and electrical engineering, plus an outside chemist and a former commissioner of the Food and Drug Administration to give regulatory advice.
Business operations are headed by Jeff Chen, a former Enbrel marketer at Immunex. Research and development is run by Jerry Miller, formerly of pharmaceutical giant AstraZeneca.
Backing from Japan
Kubota said he didn't pitch his company idea to American investors because he had the connections in Japan.
He wants to build the company in Seattle because he likes it here, it is easier to recruit talented scientists here, and he wants to run the clinical trials in the U.S., he said.
Over the past couple years, American venture capitalists have generally been unwilling to invest in biotech companies until there is some evidence products may work in people.
Kubota said he didn't have to clear that higher threshold. His investors are backing him, he said, because he previously has shown promise by discovering a gene for glaucoma, and by finding the method of keeping nerve cells alive in the lab.
"There's an old saying in Japan that if a good thing happens twice, it will happen a third time," Kubota said.
Luke Timmerman: 206-515-5644 or email@example.com