Light Sciences Oncology's hopes of raising money in the stock market foundered in February, amid a tough climate for initial public offerings...

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Light Sciences Oncology’s hopes of raising money in the stock market foundered in February, amid a tough climate for initial public offerings. But institutional financiers and venture-capital investors have just put in some $40 million to nudge the cancer-therapy company to the threshold of commercial viability, it said Tuesday.

Bellevue-based Light Sciences declined to disclose the investors involved in its third round of funding, which brought its total venture funding to $137 million.

The latest infusion provides sufficient cash to carry the company through the expensive clinical trials needed to get its two lead therapies approved by federal regulators, said Chief Financial Officer Robert Littauer.

In the first half of 2009, the company expects to ask the Food and Drug Administration to approve its first therapy, a treatment for liver cancer. A second filing, for a compound fighting metastatic colorectal cancer, is expected by the end of 2009, Littauer said.

Both products are in late-stage clinical development.

Light Sciences’ decision to tap private investors underscores the waning appetite for risk in public markets rocked by fears of recession.

There were only five venture-backed IPOs during the first half of the year, down from 43 in 2007, according to the National Venture Capital Association.

When Light Sciences pulled its $86 million IPO in February, said Littauer, “market conditions were poor, and have only gotten poorer since then.”

The company still aims to go public one day, but “we’d have to see the market come back,” he added.

Light Sciences was founded in 1994. Its approach to fighting cancer relies on a cell-killing drug that’s inert until triggered by a certain type of light.

The light is emitted from tiny diodes at the tip of a wire, which is inserted into the tumor, limiting the scope of the tissue destruction.

“If light is inside the tumor we kill the tumor,” Littauer said.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com