By Don Long

Staff Writer

Development-stage firm Cell Pathways said Tuesday that it raised about $14 million through a private placement of 1.555 million shares of stock at $9 per share. For each share purchased, the buyers also will receive one warrant that enables them to purchase an additional share of Cell Pathways common stock at $14 per share. That warrant expires Dec. 31, 2000.

Robert Towarnicki, Cell Pathways' president and chief executive officer, said the new funds would be used as "additional support for our expanding clinical investigations" of the firm's two main drugs, Aptosyn (exisulind) and CP461, both currently in clinical trials. Another use for the financing will be to gear up for commercialization of Aptosyn, Towarnicki told BioWorld Today.

The company is hoping for FDA approval of the drug next spring and that "after resolving all of the labeling issues, [marketing] will come pretty quickly thereafter - about two months," Towarnicki said.

Specifically, the marketing portion of the new funding is earmarked for developing the company's own sales force, after working through a contract sales organization initially. Towarnicki said that he has told company staff "that after 10 years of work on clinical development and approvals, we're now faced with just as daunting an effort in introducing the product to the market."

The company describes Aptosyn as a selective apoptotic anti-neoplastic drug (SAAND), and it has received both "fast track" and orphan drug designation from the FDA. Cell Pathways recently filed its new drug application (NDA) for Aptosyn and is preparing to submit additional data later this month concerning product efficacy as a supplement to the NDA.

Aptosyn is being studied as a treatment for the regression and chemoprevention of APC, or adenomatous polyposis coli, a rare disease that puts individuals at risk for colon cancer. As a protection against this, those with APC usually must have the major portion of their large intestine removed before the age of 20.

The product works by triggering apoptosis, or cell death, in abnormal precancerous and cancerous cells but does not show the toxicities of other therapeutic agents, according to Cell Pathways. Its mechanism is to block production of an enzyme identified by the company as defeating natural cell apoptosis.

The supplemental data being submitted this month comes after the company earlier in the year was forced to reanalyze factors that had skewed its Phase III trial data in the treatment of APC, causing a delay of about three months. Towarniki has said, however, that the reanalysis and additional data demonstrate the drug's efficacy.

While the company first has targeted the narrow orphan use for the drug, it hopes to expand its applications to other pre-cancerous and cancerous conditions. Aptosyn is currently in human clinical trials for its use as a therapy for Barrett's esophagus and sporadic colonic polyps and for the treatment of prostate, breast and lung cancers.

The other product the new funds will support is CP461, another SAAND compound being developed by the company. CP461 works like Aptosyn by killing cells via apoptosis but with 100 times greater potency.

Janney Montgomery Scott was the placing agent for the private offering. Participants included four funds managed by Morgan Stanley Dean Witter Investment, including the Van Kampen American Value Fund; one fund managed by Miller, Anderson & Sherrerd, LLP; and two funds managed by AIG Capital Management. Other participants in the offering were previous Cell Pathways investors Vulcan Ventures, Inc., and Jackson Boulevard Capital Management.