Aug. 21–Biolex, a company that makes medicines from pond scum, has attracted $24.4 million in venture capital — the largest amount of venture financing raised by a North Carolina company this year.

Pittsboro-based Biolex has succeeded in identifying 15 different proteins by harnessing the reproductive qualities of duckweed, a leafy plant that covers freshwater lakes and ponds.

Armed with new capital, the company plans to test these proteins in humans and — if all goes as planned — turn them into medicines that can treat a variety of ailments, including cancer, blocked arteries and rheumatoid arthritis.

“We’re already manufacturing these proteins at a lab level,” said chief executive Jan Turek. “Now we want to take this to a new level, and develop this for humans.”

The recent capital round is a major stamp of approval. All of Biolex’s existing investors, including Intersouth Partners of Durham and Franklin Street Partners of Chapel Hill, agreed to pony up more capital. And the company attracted several new investors, including Dow Chemical of Midland, Mich., and Johnson & Johnson Development of New Brunswick, N.J.

Biolex began raising a new round of venture capital at the end of 2001. It took longer than expected because of the tough financing environment.

In the second quarter of this year, venture-capital investments were down 28 percent compared with the same period a year ago, according to the National Venture Capital Association, which tracks venture-capital data. But Biolex never stopped fund raising, and the company managed to raise nearly three times as much as its last venture-capital round.

“This is a large and impressive syndicate” of investors, said John Glushik, partner with Intersouth, which led the round. “It validates the technology and shows a high level of confidence in this management team.”

Using a patent developed by researchers at N.C. State University, Biolex inserts human DNA into duckweed, which secretes proteins that can be converted into medicines. Duckweed, also known as pond scum, is an ideal medium because it doubles every 36 hours.

Biolex conducts its experiments in an old hosiery mill in Pittsboro. With the new capital, the company plans to buy more manufacturing equipment and add 10 people to its 35-person staff, Turek said.

So far, the company has signed corporate partnership agreements with four drug companies. The largest is Bayer, which has hired Biolex to study the manufacturing of two protein-based drugs that Bayer is developing. One is human plasminogen, a natural protein that is being developed to treat blocked arteries.

Though other companies use genetic engineering to develop drugs, few have done so using a plant in a controlled environment, said Matt Rieke, principal of Quaker VioVentures, a Philadelphia-based venture-capital firm that agreed to invest in the recent round. “We looked at a dozen firms, but none of them had technology like this,” he said.

If the company proves that its proteins can work in humans, it should consider going public, said Intersouth’s Glushik.

This venture-capital round is “a launching pad to bigger things,” he said. “Biolex has a very real chance of being a public company and becoming a major player in the drug development industry.”

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