Cell Therapeutics Inc. is adding $20 million to its coffers from a registered offering to a single institutional investor, fortifying itself for the final stages of development of pixantrone and Opaxio.
The unidentified investor on Monday purchased for $15 million shares of Series 1 preferred stock with a stated value of $15 million and associated common stock warrants. It also has the right to, within 60 days, buy for an additional $5 million additional shares of preferred stock worth $5 million with no additional warrants. The stock is convertible into shares of common stock at a conversion price of 30 cents.
The investor received 45 percent warrant coverage on the initial $15 million purchase, the company said. The warrants have an exercise price of 41 cents per share, for total potential additional proceeds of approximately $9 million.
CTI has been in cash-acquisition mode recently. In December 2008 it collected $15 million from Spectrum Pharmaceuticals Inc. for a half interest in the radioimmunotherapy drug Zevalin ([90Y]-ibritumomab tiuxetan), then in February agreed to sell all of its interest for an additional $18 million.
The company, which announced plans to lay off 62 workers at its Bresso, Italy, operation to save $14 million in annual costs, is focusing efforts on the final push for pixantrone, which met its primary endpoint in the pivotal EXTEND trial in patients with advanced, relapsed aggressive non-Hodgkin's lymphoma last year. (See BioWorld Today, Nov. 12, 2008.)
Preliminary pivotal data showed that pixantrone, a DNA intercalating cancer drug designed with a safer profile than existing anthracycline therapies, demonstrated a 3.5-fold higher complete remission/unconfirmed complete remission rate compared to standard chemotherapy. The company has said it expects to file a new drug application with the FDA later this year.
Also in Phase III is Opaxio (paclitaxel poliglumex, CT-2103) in patients with previously untreated non-small-cell lung cancer. Data released last year showed it failed to meet its primary endpoint of improving overall survival compared with treatments of gemcitabine or vinorelbine. However, patients treated with Opaxio required less supportive care, including fewer red blood cell transfusions, hematopoietic growth factors and opioid analgesics than those who received either gemcitabine or vinorelbine.
Shares of Cell Therapeutics (NASDAQ:CTIC) lost 7 cents Monday, or 19 percent, to close at 31 cents.
In other financing news:
• NeoStem Inc., of New York, completed a private placement of $11 million from three Asian-based investors, including a private equity firm operating in partnership with investors drawn from Asian families and businesses. The financing consists of units priced at $12.50 per unit, with each unit consisting of one share of the preferred stock and 10 warrants each to purchase one share of common stock (resulting in an equivalent price of $1.25 per common share plus an attached warrant). The warrants have a per-share exercise price equal to $2.50 and are callable by the company if the common stock trades at a price equal to $3.50. The investing firms are RimAsia Capital Partners LP, Enhance Biomedical Holding Corp. and Elancrest Investments Ltd. The funds will be used to support the development of NeoStem's very small embryonic-like stem cells technology and to advance its expansion activities in China.
• RegeneRx, of Bethesda, Md., raised gross proceeds of $600,000 by selling to the Sigma-Tau Group 1,052,631 shares of common stock at a price per share of 57 cents. The company has agreed to issue to the purchaser warrants to purchase an additional 263,158 shares at 91 cents per share. The company also implemented a cost-reduction program, including a 35 percent reduction in salaries. In return, the employees have received, in the aggregate, options to purchase 698,138 shares of RegeneRx common stock at a price of 57 cents. The board of directors also approved a 35 percent reduction in compensation of nonemployee directors, who in the aggregate received options to purchase 64,157 shares of RegeneRx common stock at 57 cents per share. Shares of RegeneRx (AMEX:RGN) gained 12 cents Monday, or 21 percent, closing at 69 cents.