Washington Editor

Although Adventrx Pharmaceuticals Inc. Monday insisted there were no surprises with its six-month stability data for its non-small-cell lung cancer compound ANX-530 (vinorelbine injectable emulsion) and also announced a new $19.2 million financing, investors apparently were irked by the news, driving shares of the San Diego-based biotech down 22.3 percent.

Shares of Adventrx (AMEX:ANX) closed at $2.83 Monday, a loss of 81 cents.

Monday's stock dive followed a walloping the firm's shares took last month after the company announced it had received a refuse-to-file letter from the FDA for ANX-530, which Adventrx plans to sell as Exelbine. Regulators said the manufacturing site for ANX-530 was insufficient to support a commercially viable expiration dating period. (See BioWorld Today, March 2, 2010.)

Adventrx in October 2008 had engaged a new contract manufacturer to conduct development and scale-up activities for ANX-530.

That manufacturer, however, is not the one used in Adventrx's bioequivalent study of ANX-530.

Last week, the stock took another hit when Adventrx said it did not plan to resubmit ANX-530's application until the fourth quarter. (See BioWorld Today, April 28, 2010.)

Adventrx did not return calls about its ongoing study from its intended commercial manufacturing site, but said in a statement that the six-month stability data were "on track" to support the firm's resubmission of ANX-530's application.

"These results are what we expected and what we expect to see from the 12-month data," CEO Brian Culley maintained.

For its financing, the company said it signed agreements to purchase shares of its Series F convertible preferred stock pursuant to a registered direct offering to institutional investors, which Adventrx said represented gross proceeds of about $19.2 million.

The firm said the convertible preferred stock is convertible into common stock at the option of the investors at a conversion price of $3.70 per share, accruing a 2.19 percent cumulative dividend until May 6, 2020.

Adventrx said it plans to use the net proceeds from the offering to fund activities related to acquiring and developing additional product candidates and to continue development of its current lead product candidates. The company said it also intended to use the funds for general corporate purposes.

Adventrx said it planned to place about $4.2 million of the gross proceeds in an escrow account, with those funds intended to be released to make the dividend and other payments.

Under the offering, investors will receive Series A warrants to purchase an aggregate of 1.8 million shares of Adventrx's common stock at a price of $3.65 per share. The company said the warrants are exercisable at any time after the closing of the transaction and before the five-year anniversary of their initial exercise date. Investors also will receive Series B warrants to purchase an aggregate of 778,547 shares of common stock at an exercise price of $3.65 per share.

Adventrx said those warrants are exercisable at any time after the closing of the transaction and before the date that is 10 trading days after the one-year anniversary of their initial exercise date.

Rodman & Renshaw LLC acted as the exclusive placement agent for the transaction, which is expected to close by Thursday. Caris & Co. Inc. acted as the financial adviser to Adventrx.

In other financings news:

• Adherex Technologies Inc., of Chapel Hill, N.C., said it has completed a first closing of its previously announced nonbrokered private placement of 240 million units at a price of C3 cents per unit for gross proceeds of C$7.2 (US$7.1 million). Adherex said it intends to raise up to an additional C$1.8 million through a nonbrokered private placement, which it said would occur in one or more closings, and up to an additional C$12.75 million through a rights offering. The company said it plans to use the proceeds to conduct and monitor a Phase II study of eniluracil, an irreversible inhibitor of dihydropyrimidine dehydrogenase being developed to improve the therapeutic value of 5-fluorouracil. Adherex said it also plans to use the funds to satisfy corporate overhead and related expenses and pay financing-related expenses.

• BSD Medical Corp., of Salt Lake City, said it entered into a securities purchase agreement with two institutional investors for the sale of 1.64 million shares of its common stock in a registered direct offering at $1.52 per share for gross proceeds of about $2.5 million. In addition, BSD said warrants to purchase 1.23 million shares of common stock in the aggregate would be issued to the investors, with those warrants exercisable beginning six months and one day after closing, expiring five years after becoming exercisable. The warrants have an exercise price of $1.94 per share.

• Corcept Therapeutics Inc., of Menlo Park, Calif., said it raised gross proceeds of $7.7 million from the exercise of existing warrants and the private placement of new warrants. The company said investors who received warrants in the private placement agreed to exercise those cash warrants for $1.66 per share. Corcept said the additional funds have given the firm sufficient capital to support its operations into the second quarter of 2011. Participants in the transaction included existing investors Longitude Capital, Sutter Hill Ventures, Federated Kauffman Funds and members of Corcept's board. The firm also said it has nearly completed enrollment of its Phase III trial of Corlux (mifepristone) in patients with Cushing's syndrome, a condition caused by prolonged exposure of the body's tissues to high levels of the hormone cortisol due to either cortisol or ACTH production by tumors. The company said 45 of 50 patients have been dosed in the study.

• Stratatech Corp., of Madison, Wis., has closed a $3 million round of funding comprised of convertible notes from current investors. The proceeds will be used to advance the clinical trial of the company's StrataGraft living human skin substitute tissue. The company expects to begin Phase IIb of the trial during the second half of this year.