BioWorld Today Correspondent

Clavis Pharma AS cashed in on its recent success in the clinic by grossing NOK129 million (US$20.1 million) in a private placement directed at new and existing institutional shareholders.

The Oslo, Norway-based firm is issuing 10.75 million new shares, priced at NOK12 per share, which represents a slight discount to the company's closing share price of NOK12.50 on Thursday, immediately before the transaction was disclosed.

The transaction is subject to shareholder approval, but Clavis said it has already received the requisite level of support. It also plans to provide existing shareholders who did not participate in the first phase of the transaction an opportunity to acquire shares on the same terms. It plans - again subject to shareholder approval - to issue another 650,000 shares, which, at NOK12 per share, would raise an additional NOK7.8 million.

An extraordinary general meeting, scheduled for mid-July, will vote on those moves. But judging from investor reaction to the news Friday, it's unlikely that the company's plans will be derailed. The company's stock (OSLO:CLAVIS) gained 28 percent on the previous day's close of NOK12.50 on news of the placement, to close at NOK16, the top gainer on the Oslo Børs exchange.

CEO Geir Christian Melen told BioWorld Today that a combination of factors helped to deliver the oversubscribed share placing.

"We have a deep and very promising pipeline," he said. Its lead drug candidate, elacytarabine, recently exhibited a threefold survival benefit - compared with published data - in a Phase II trial in patients with advanced acute myeloid leukemia (AML). "It's safe to say the recent data definitely helped very much in the transaction," he said.

The financing was mainly directed at a domestic audience and brought in several new Norwegian institutional investors. "In this financial environment, it's a little bit harder to attract international money," Melen said. However, once completed, the transaction will help the company to raise its profile with international life sciences investors, he added. "We have a good basis for doing that now."

The company, which reported NOK66.5 million in cash and equivalents on March 31, now is funded into the third quarter of 2011. It aims to use the cash to progress several programs.

Preliminary planning for a Phase II/III registration trial of elacytarabine in AML is under way at present. "We plan to start that at the year-end or early next year," Melen said. Interim data could be available by the end of 2010. "If the data are positive, it could be the basis of an application for accelerated approval," he said.

The company's market entry strategy is based on addressing third-line AML patients, who already have failed one round of salvage therapy. However, it also will explore other settings that involve the nucleoside analogue cytarabine in combination with other agents, such as an anthracycline.

Clavis' core "lipid vector technology" involves the addition of a fatty acid tail - elaidic acid in the case of elacytarabine - which alters the uptake of a drug and its retention within the cell and bypasses tumor resistance mechanisms.

The technology was developed over a decade at Norsk Hydro ASA, the Norwegian chemical and petrochemical group, before being spun out into Clavis (formerly ConPharma) in 2001.

Its second clinical stage product, CP-4126, comprises the same lipid moiety attached to gemcitabine, currently marketed (though soon to go off patent) as Gemzar by Indianapolis-based Eli Lilly and Co. A Phase II trial has just begun, and that will yield initial data in 2010. A Phase I trial of an oral version of CP-4126 is ongoing.

Also ongoing is a preclinical proof-of-concept study of CP-4200, a derivative of azacitidine, the myelodysplastic syndrome marketed as Vidaza by Celgene Corp., of Summit, N.J.

The new infusion of cash will strengthen the company's hand in any partnering negotiations. Clavis aims to partner its internal programs rather than its LVT platform, although the company has preliminary data on about 150 LVT-modified compounds.

In other financing news:

• Med BioGene Inc., of Vancouver, British Columbia, said it closed the second tranche of its nonbrokered private placement of 4.6 million units for proceeds of C$366,121 (US$317,312). Gross proceeds from both tranches totaled C$1.6 million. Each unit was priced at C8 cents and consisted of one common share and one-half of one common share purchase warrant. Med BioGene develops genomic-based personalized clinical laboratory diagnostic tests.

• Medicure Inc., of Winnipeg, Manitoba, said it plans to raise up to C$3 million (US$2.6 million) through a nonbrokered private placement of common shares priced at C5 cents each. The maximum number of shares to be issued represents about 46 percent of the number of common shares of Medicure currently issued and outstanding, and Albert D. Freisen, president and CEO, is expected to subscribe for about 33 percent of the common shares issued. The offering is part of the firm's ongoing effort to stabilize business. Proceeds will be used for working capital purposes and are expected to provide management with additional resources to refine its strategy regarding the development of Aggrastat and MC-1/Avastrem. Shares of Medicure (TSX:MPH) closed at C3 cents Friday.

Published  June 29, 2009