Swedish neurosciences specialist NeuroNova has raised €12 million in a private financing and entered into a collaboration agreement with Denmark's Lundbeck to study the effect of chemical compounds on precursor cells of the adult mouse brain.

NeuroNova was formed on the back of research conducted at Sweden's Karolinska Institute. The company's technology platforms include a neurogenesis programme, focusing on the development of drugs that stimulate endogenous stem or progenitor cells to repopulate damaged areas of the brain. It is developing a broad pipeline of therapeutic proteins and small-molecule drugs to treat significant diseases of the central nervous system, including Alzheimer's disease, Parkinson's disease and stroke.

The company has several drug candidates in various stages of discovery and preclinical development and aims to enter clinical trials once their therapeutic efficacy and safety have been established in animal models.

A second programme, adult stem cell therapy, is aimed at generating cultured adult precursor cells capable of restoring brain function following transplantation in patients with CNS disorders. NeuroNova has developed methods to proliferate adult neural stem and progenitor cells in culture and to differentiate them into neurons and is currently conducting preclinicalstudies to assess their therapeutic potential.

Discussing the new fund-raising, NeuroNova's CEO, Anders Haegerstrand, said: "We have been very successful in converting our discoveries on the regenerative capacity of the brain into potential products. The new financing allows us to accelerate our most advanced projects towards clinical trial phase and to strengthen our neurogenesis technology platform."

The deal with Lundbeck is an endorsement of the company's approach, as the Danish company is a leading player in CNS drug development. It has in its portfolio one of the world's top-selling antidepressants - Cipramil (citalopram) - and the Alzheimer's drug Ebixa (memantine), the first NMDA antagonist to be approved for this indication.

Meanwhile, activity in the financing market seems to be looking up for the European biotechnology industry. Other companies reporting successful fundraisings this week include:

• Denmark's Zgene , which has raised DKK 15 million (€2.0m) from an investment second round by Symbion Capital I and Dansk Innovationsinvestering. To date, the firm has raised around DKK 22.2 million in support of its cancer therapy system, ZAS, which uses enzymes to enhance the effect of current anti-cancer drugs and also reduce their toxicity;
• Xention Discovery of the UK, which has raised £4 million (€5.7m) in a private equity financing. The company focuses on the discovery and development of drugs that target ion channels; and
• the UK's DNA Research Innovations , which received a second payment of £2.5 million from private investors after successfully achieving technical and commercial milestones in its Charge Switch Technology for DNA extraction and purification technology. The company aims to capture a significant part of the £500 million DNA purification market that continues to grow at around 20 per cent a year.