About a week after it was stung by an FDA advisory panel vote over Pixuvri (pixantrone), and three weeks away from an FDA action date on the drug, Cell Therapeutics Inc. raised $20 million in a stock sell to three institutional investors.

The shares involved are Series 4 preferred stock and warrants to purchase common shares , with each Series 4 preferred stock convertible into 2,000 shares of common stock at a conversion price of $0.50 per share, for a total of 40 million common shares.

The investors also received warrants to purchase up to 20 million shares of common stock. The warrants have an exercise price of $0.6029 per warrant share, for total potential additional proceeds of approximately $12 million. The warrants are exercisable six months after issuance and terminate four years after the date of issuance.

Seattle-based CTI took a 48 percent stock hit last week after the FDA's Oncologic Drugs Advisory Committee voted unanimously that the company's data for Pixuvri were insufficient for an accelerated approval as a single-agent treatment of patients with relapsed or refractory aggressive non-Hodgkin's lymphoma who have received two or more prior lines of therapy.

FDA officials were critical of CTI for using a single study to support a new drug application in oncology, especially since only 44 percent of the originally 320 planned patients were accrued. CTI said it stopped its Phase III trial with only 140 patients due to poor accrual, which it attributed to preferences for combination regimens in the U.S. and Western Europe or palliative care in late-stage diseases, the widespread adoption of front-line therapy with Rituxan (rituximab) during the course of the study and the limited availability of a patient population meeting the company's eligibility criteria. (See BioWorld Today, March 23, 2010.)

The company has an April 23 FDA action date on Pixuvri.

Two days after the panel vote, CTI was the subject of a class-action federal lawsuit by a group of investors alleging that pixantrone is cardiotoxic despite CTI's claims to the contrary. The lawsuit also claimed that CTI failed to disclose that pixantrone's special protocol assessment had been invalidated, and that the pixantrone study enrolled a large number of patients who did not suffer from aggressive non-Hodgkin's lymphoma.

The company said it plans to use the proceeds for working capital and general corporate purposes, possibly including paying interest on and or retiring portions of its outstanding debt, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications and general working capital.

Rodman & Renshaw LLC acted as the exclusive placement agent.

On Wednesday, CTI shares (NASDAQ:CTIC) dropped 6 cents, or 10.6 percent, to close at 54 cents.

In other financing news:

• CytoDyn Inc., of Santa Fe, N.M., raised $3 million in two private placements, one of which offered restricted common stock to a select group of investors while the other offered convertible preferred shares to a broader range of investors. Proceeds are expected to support development of the company's lead product, Cytolin, an immune therapy for treating HIV/AIDS. Funds also will be used to maintain and expand its international patent portfolio, for regulatory compliance and for general business operations.

• Diamyd Medical AB, of Stockholm, Sweden, is issuing 291,667 new B shares in a direct placement at SEK120 per share. The issue price corresponds to the average market price of the past 30 trading days. Total proceeds for Diamyd amounts to SEK35 million (US$4.8 million). The money will supplement current funds, which are dedicated to financing the ongoing Phase III program of the diabetes vaccine Diamyd.

• Hunter Immunology Ltd., of Sydney, Australia, is raising up to A$9.2 million (US$9.1 million) to fund a Phase IIb trial of its lead product HI-164OV. The fundraising was led by the IB Australian Bioscience Fund and Soho Pharmaceuticals. In connection with the fundraising, Jeremy Curnock Cook, managing director of the IB Fund, becomes a nonexecutive director to the Hunter board.

• IGI Laboratories Inc., of Buena, N.J., raised $1.55 million through the private placement of Series C convertible preferred stock to investors affiliated with Signet Healthcare Partners GP and Jane E. Hager, a director. Each share is convertible into shares of common stock equal to 1,000 plus any accrued and unpaid dividends, divided by $0.69, the closing price of the stock on the date of issuance.

• Marshall Edwards Inc., of New Canaan, Ct., has effected a reverse stock split at a 1-for-10 reverse split ratio. The split of its outstanding common stock took effect Wednesday. The company's shares will continue to trade on a split-adjusted basis under the temporary ticker symbol "MSHLD" for 20 trading days to indicate the reverse split has occurred.

• NovaDel Pharma Inc., of Bridgewater, N.J., entered a purchase agreement to raise approximately $1.5 million through the sale of 9 million shares of its common stock to institutional investors at a price of $0.165 per share. The investors also will receive five-year warrants to purchase approximately 4.5 million shares at $0.25 per share. In addition, the investors will receive six-month warrants to purchase approximately 3 million additional shares at $0.25 per share. Chardan Capital Markets LLC served as the placement agent.

• Oxygen Biotherapeutics Inc., of Durham, N.C., filed a shelf registration to raise up to $75 million though the sale of common stock. The price and number of shares would be determined at the time of any offering. Proceeds will be used for general corporate purposes, including capital expenditures, working capital, repayment of indebtedness, acquisitions and other business opportunities. Shares of Oxygen (NASDAQ:OXBT) fell 25 cents to close Wednesday at $5.

• Somaxon Pharmaceuticals Inc., of San Diego, has closed its public offering of 6.9 million shares of its common stock, including 900,000 shares sold pursuant to the full exercise of an overallotment option previously granted to the underwriters, at a price to the public of $8.25 per share. The net proceeds are expected to be approximately $52.8 million. Jefferies & Co. Inc. acted as sole book-running manager in the offering. The co-manager in the offering was Oppenheimer & Co. (See BioWorld Today, March 29, 2010.)