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REPEAT/KOSAN Raises $3 Million and Announces Combinatorial Biosynthesis Screening Collaboration with Chiron.

BURLINGAME, Calif.--(BUSINESS WIRE)--May 21, 1996--KOSAN Biosciences Inc., a recently formed biotechnology company based in Burlingame, announced today that it has raised $3 million in an early round of investment financing from venture firm Alta Partners, biotechnology company Chiron Corp. (NASDAQ NASDAQ
 in full National Association of Securities Dealers Automated Quotations

U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on
: CHIR CHIR Chiricahua National Monument (US National Park Service) ) and co-founder Daniel V. Santi, M.D., Ph.D.

As part of its investment, Chiron has begun a collaboration with KOSAN to screen a propriety KOSAN combinatorial library combinatorial library

in immunology, the ligation of cDNAs of light and heavy chains of immunoglobulins, each in a separate bacteriophage vector.
 of polyketides against several of Chiron's disease targets.

KOSAN Biosciences has a mission to develop and apply "combinatorial biosynthesis Biosynthesis

The synthesis of more complex molecules from simpler ones in cells by a series of reactions mediated by enzymes. The overall economy and survival of the cell is governed by the interplay between the energy gained from the breakdown of compounds
" -- the generation of novel organic molecules derived from natural products (so-called "unnatural" natural products) by genetic engineering of biosynthetic bi·o·syn·the·sis  
Formation of a chemical compound by a living organism. Also called biogenesis.


Combinatorial biosynthesis is a unique approach for the biological production of combinatorial libraries of organic compounds related to molecules of major therapeutic importance.

KOSAN was co-founded in 1995 by Santi, who is professor of Biochemistry and Pharmaceutical Chemistry at the University of California, San Francisco Coordinates:  , and by Chaitan Khosla, Ph.D., assistant professor of Chemical Engineering and Chemistry at Stanford University Stanford University, at Stanford, Calif.; coeducational; chartered 1885, opened 1891 as Leland Stanford Junior Univ. (still the legal name). The original campus was designed by Frederick Law Olmsted. David Starr Jordan was its first president. .

Santi was founder and chairman of Protos Corp., which merged with Chiron in 1992 to help form its Drug Discovery Research group and was later founder of Parnassus Pharmaceuticals.

Khosla is the inventor of the combinatorial biosynthesis technology, which has the potential for greatly accelerating the evolution of natural products without waiting for nature.

KOSAN has exclusive rights to the Khosla technology from Stanford University and to a technology to develop diagnostic reagents with combinatorial biochemistry.

KOSAN uses combinatorial biosynthesis to produce large libraries of novel, genetically engineered genetically engineered adjective Recombinant, see there  chemicals related to natural products known as "polyketides."

Polyketides are a diverse group of natural products found in soil bacteria, which have yielded antibiotics such as erythromycin erythromycin (ĭrĭth'rōmī`sĭn), any of several related antibiotic drugs produced by bacteria of the genus Streptomyces (see antibiotic). , anti-cancer agents such as adriamycin and a host of other therapeutics including immunosuppressants immunosuppressants, the agents that lower or reduce immune response; useful in organ transplant surgery to prevent organ rejection. Corticosteroid hormones given in large amounts; cytotoxic drugs, including antimetabolites and alkylating agents;
, cholesterol-lowering agents, antifungals and antiparasitic antiparasitic /an·ti·par·a·sit·ic/ (-par?ah-sit´ik) destructive to parasites, or an agent with this quality.


Together, polyketides have a worldwide market of more than $5 billion per year in pharmaceutical sales.

The number and diversity of polyketides in KOSAN's combinatorial libraries should eventually exceed those found in nature and new drug candidates seem certain to result.

Combinatorial biosynthesis can also be used to produce other "unnatural" natural products such as derivatives of non-ribosomal peptides used in organ transplants and infections and aminoglycoside aminoglycoside /ami·no·gly·co·side/ (-gli´ko-sid) any of a group of antibacterial antibiotics (e.g., streptomycin, gentamicin) derived from various species of Streptomyces  antibiotics.

The Chiron collaboration with KOSAN will screen a propriety KOSAN combinatorial library of polyketides against several disease targets Chiron will identify. If promising leads are found, Chiron will have the right to license and develop those compounds and KOSAN will receive milestone and royalty payments.

Chiron also licensed non-exclusive rights from KOSAN to use its proprietary technology for the discovery of new diagnostic reagents using combinatorial biochemistry.

"Both Alta Partners and Chiron Corporation Chiron Corporation was a multinational biotechnology firm based in Emeryville, California that was acquired by Novartis International AG on April 20 2006. It had offices and facilities in eighteen countries on five continents.  have a strong track record of identifying innovative, successful technologies, and we are pleased that they have shown confidence in the KOSAN technology," said Santi. "I am also personally pleased to have the opportunity to work again with Chiron to develop a new technology and new company."

"This investment, and the collaboration with Chiron, will give KOSAN the resources to develop combinatorial libraries of unnatural natural products of comparable size and diversity found in nature," added Khosla.

"The KOSAN combinatorial biosynthesis technology complements other diverse and novel approaches Chiron is assembling and managing to help speed our drug discovery and development," said Walter H. Moos, Ph.D., vice president, research and development, Chiron Technologies. "We also look forward to working again with Dan Santi, and the group that he has brought together."

Alta California Partners is a successor fund to the funds managed by Burr, Egan, Deleage & Co. (BEDCO). The General Partners Jean Deleage, Guy Nohra, Marino Polestra and Garrett Gruener, are also General Partners of Alta V, the last BEDCO-managed fund.

Jean Deleage will join the KOSAN Biosciences board of directors representing Alta Partners. Deleage was on the board of Chiron Corp. from its inception in 1981 until 1992.

"Alta Partners recognizes the potential of this novel and powerful new area of drug discovery," said Deleage. "Most of the current combinatorial chemistry companies present variations on a similar theme; KOSAN is providing a new theme."

For additional information, contact Joana L. Voglino, KOSAN Biosciences Inc., 1450 Rollins Rd., Burlingame, Calif. 94010, 415/343-8673.

CONTACT: KOSAN Biosciences Inc., Burlingame

Daniel V. Santi M.D./Joana L. Voglino, 415/343-8673


Chiron Corp.

Larry Kurtz, 510/601-2476
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Date:May 22, 1996
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