West Coast Editor
If the FDA's delay of approval for Corixa Corp.'s lead cancer product, Bexxar (tositumomab, iodine-131), is doing harm regarding investors, you wouldn't know it from the company's news Monday that it entered a purchase agreement to raise about $45 million in a private placement.
"Cash is not an issue near term," said Michelle Burris, Seattle-based Corixa's senior vice president and chief financial officer. "We ended the quarter with $80 million in cash, and we still have an equity line of $75 million with the Bank of New York."
Shares will be registered, she added, so the company is limited by SEC rules about how much can be said.
In the transaction, which is expected to close Wednesday, about 7.3 million newly issued shares of common stock for $6.13 each will be sold to selected institutional and other accredited investors. Investors also are buying, for another $0.125 per underlying share, 1.2 million five-year warrants for common stock at the $6.13 exercise price.
The company's stock (NASDAQ:CRXA) finished Monday at $6.31, up 19 cents. Corixa said in a press release that it intends to use proceeds for research and development, working capital and general corporate purposes.
"A lot of people are focused on Bexxar, but there are other things [at Corixa] as well, and we want to be able to continue to fuel our pipeline," Burris said. Corixa has 16 programs in clinical trials and 22 programs in various preclinical stages.
In June, the firm won its appeal of an FDA decision in March that would have required more trials in order to market Bexxar, a radioimmunotherapy for low-grade or transformed low-grade non-Hodgkin's lymphoma. (See BioWorld Today, March 14, 2002, and June 28, 2002.)
That doesn't mean Bexxar is a shoo-in for approval, but the company, which has partnered Bexxar with GlaxoSmithKline plc, of London, at least gets to present its case to the FDA's Oncologic Drugs Advisory Committee, which could happen by the end of the year.
Burris told BioWorld Today that "on the current track," no new trials will be required, but nothing is settled definitively.
"ODAC will determine that," she said.
Many had expected Bexxar to end up in front of ODAC earlier this year, but the FDA said that its reviewers had not had time to study all the material submitted as part of the biologics license application. (See BioWorld Today, Jan. 11, 2002.)
The financing is being led by InterWest Partners, of Menlo Park, Calif., and includes investments from BankAmerica Ventures, of La Jolla, Calif.; Frazier Healthcare Ventures, of Seattle; Hambrecht & Quist Capital Management LLC, of Boston; KBL Healthcare Ventures, of New York; Oxford Bioscience Partners, of Boston; and Sutter Hill Ventures, of Palo Alto, Calif. The placement agent is Pacific Growth Equities Inc., of San Francisco.