The prognosis for those who suffer from glioblastoma multiforme, a common form of brain cancer, is 11 months. About 8,000 people are diagnosed with it every year.

A Penn State University scientist, Waldemar Debinski, has developed a drug intended to eliminate the tumors without destroying healthy cells. Targepeutics Inc., a Derry Township company Debinski started to commercialize his research, has been waiting for more than a year for venture capital to start clinical trials.

Recently, the company was passed over by the Life Sciences Greenhouse of Central Pennsylvania during its round of funding in April for Technology Development grants.

Many other companies are struggling like Targepeutics – stuck in a buyer’s market brought on by the economic downturn. Investors are more cautious about where their money is going, and that is unlikely to change until the economy picks up, experts say.

Venture capital investment in Pennsylvania continued its steady decline in the first quarter of 2003, according to a recent survey by the National Venture Capital Association and several of its partners. Nationwide, it hit a five-year tow.

Industry leaders cited the war in Iraq and the economic downturn for the penny-pinching.

According to the survey, 16 companies in Pennsylvania received more than $102 million in the first quarter of 2003. That is compared with 27 companies receiving more than $20.0 million in the first quarter of 2002.

The majority of money invested this year went to southeastern Pennsylvania: Montgomery County received about $41 million; Chester, $35 million; and Bucks, about $12 million.

No companies from Cumberland, Dauphin, Lancaster, Lebanon or York counties received venture capital during the first quarter, according to the survey. But some companies are being considered for funding, said Jill Edwards, executive director of the Ben Franklin Venture investment Forum, Middletown. “I don’t think anyone (here) should consider the capital investment market dead.”

The Life Sciences Greenhouse of Central Pennsylvania jumpstarted investment in the second quarter in this area. In April, it awarded nearly $100,000 each to 14 researchers and companies. The Technology Development grants will be used to see if the research and technology developed at area universities is marketable. The greenhouse has $8.5 million to distribute over five years. A funding round will be held every six months.

Biotechnology generally is a tough niche because investors tend to know little about the field, Edwards said. “People prefer to invest in something they understand,” she said.

For companies that need less than $3 million, it is better to seek an angel investor, Edwards said. An angel investor is someone who provides funding in return for a share of the profits but does not demand control over who runs the company Venture capital firms are looking for a minimum of $3 million to $5 million.

A Pennsylvania-based pharmaceutical company recently started testing Debinski’s drug. Sil Lutkewitte, president of Targepeutics, said he is hopeful the pharmaceutical company which he would not name – will give Targepeutics the $2 million it needs to start clinical trials.

Lutkewitte said he hopes Targepeutics will get funding in the fall. His mother, Walene, died in 2001 from the brain cancer Targepeutics might be able to cure. He became president of the company in January. “I have a passion to see this process and this drug succeed,” he said.

Efforts to reach Debinski were unsuccessful.

Targepeutics still needs $200,000 to finish an application to the U.S. Food and Drug Administration to gain approval for the clinical trials. Lutkewitte said he was disappointed not to get funding from the greenhouse.

Lutkewitte, who works for the company for free, said the greenhouse wanted Targepeutics to make several changes before it would consider giving it money: it would need a chief executive officer other than Debinski, who is the chief scientific officer; it also would need to change the way it manages its intellectual property, among other things.

Kevin Harter, vice president of business development for the greenhouse, said he considered giving Targepeutics money from the $10 million Gap Fund, which funds companies ready to go to market. He said he turned down the company because he had some concerns about management, but he said Lutkewitte is a good addition to the company. “In general they have a lot of work to do,” Harter said. “We’re looking forward to him reapplying.”

Harter said he could not comment on why Targepeutics did not get Technology Development funding because an independent panel made that decision. He said the first round was very competitive – 30 other companies also were passed over.

Targepeutics hopes to be ready for the next round of Technology Development funding in September, Lutkewitte said.

About Targepeutics

Targepeutics is a biopharmaceutical company that has acquired the license and options for various technologies developed by Penn State University scientist Waldemar Debinski.

Debinski started it with fellow professor Lynn Maines, who serves as the company’s vice president. Sil Lutkewitte took over as president in January.

Through the licensing agreement, Penn State will get a percentage of the revenue made from commercializing the research. Penn State would not disclose that percentage.

The company is working on vaccines for the treatment of cancer and asthma and a drug to control the growth of advanced-stage tumors.

Targepeutics also plans to develop cancer diagnostic test kits.

Copyright Journal Publications Inc. Jul 18, 2003