By Brady Huggett
Staff Writer
Vion Pharmaceuticals Inc. agreed to sell 2.5 million shares of common stock at $5 per share, raising about $12.5 million in a public offering.
Gerard Klauer Mattison & Co. Inc., of New York, and C.E. Unterberg, Towbin, also of New York, are managing the underwriting. They have an option to purchase up to 375,000 shares during the next 30 days. The net proceeds of the offering, expected to be about $11.4 million, are going right into the clinic, said Steven Koehler, chief financial officer at Vion.
The primary plans are for our clinical trials, Koehler said. We are in Phase I and Phase II trials. And well use it for general corporate purposes.
Vions stock (NASDAQ:VION) closed Thursday at $6.12. It slid $1.12 Friday, or about 18 percent, ending the day at $5. The shares were sold pursuant to a shelf registration statement declared effective in June, in which the company could sell up to 4.7 million shares.
The cash infusion, added to what Vion had at the end of the second quarter, should power Vion until 2003, Koehler said.
As of the end of June, we had $17.5 million in cash, which we thought would get us well into the second quarter of next year, he said. So this should carry us to the end of next year.
Typically, Vion burns about $4.5 million to $5 million per quarter, Koehler said. Before the offering, Vion had about 26.3 million shares outstanding.
It generated $180,992 in revenue in the second quarter, down from $220,510 in the same period of 2000, a decrease of about 18 percent. It had a loss applicable to common shares of about $3.2 million in the quarter, or roughly 12 cents per share.
Vion, of New Haven, Conn., has its DNA synthesis and repair inhibitor, Triapine, in multiple trials.
We have announced two Phase II trials, one in leukemia and one in breast cancer, Koehler said, adding that the studies are single-agent trials. And we have a number of Phase I trials in combination with other drugs.
Tapet, Vions modified Salmonella vector for delivering anticancer agents to tumors, is in Phase I trials, but Vion is planning for Phase II.
Its progressing well, Koehler told BioWorld Today. Weve had approval to go to the armed trials. Its a vector, so the trials have been without any other product loaded into it. We hope to [initiate Phase II trials] by the end of this quarter, but we dont have any other date than that.
Completing lineup of clinical trials is VNP40101M, a DNA alkylating agent in Phase I studies. Vion should begin Phase II work with the agent sometime next year, but we need to take care of Phase I first, Koehler said.
Basically, though, Koehler said the funding does what many of them do: provides fuel and ensures the gauge stays above empty.
What this means is we are going to be able to aggressively pursue these clinical trials and carry them further along than we would have been able to do otherwise, he said.