Israel's Aposense raised more than $24 million in an initial public offering and concurrent private placement of stock, money that will allow the company to move ahead on two tracks in the area of molecular imaging as well as drug development.
At a time when the IPO market has been closed to most U.S. biotech firms, the market in Israel has made a strong recovery and "we do see IPOs here," Aposense CEO Yoram Ashery told BioWorld Today.
The deal values the company at more than $230 million, and Aposense's shares will be listed on the Tel Aviv Stock Exchange.
Prior to the IPO, Aposense had about $15 million in the bank, enough to continue operations for more than a year. So the company was not in urgent need of cash. However, it had to conserve resources in order to focus attention on the molecular imaging side, Ashery said.
With the added funds, the company now has the cash to enter additional therapeutic areas without slowing down on the molecular imaging program, Ashery explained.
Aposense is conducting Phase II trials for [18F]-ML-10, its novel tracer for imaging apoptosis with positron emission tomography (PET), and its EarliTest system designed to provide an early indication of how cancer patients are responding to their treatments.
The noninvasive imaging of apoptosis enables real-time assessment of the biological activity of the disease. Such imaging could allow physicians to watch the cancer at a cellular level as it changes course or responds to treatment, unlike conventional imaging technologies such as X-ray, ultrasound or MRI, which provide an image of anatomical structures. [18F]-ML-10 is labeled with the radio-isotope 18F, the most commonly used isotope in PET imaging, which enables tracing of the ML-10 molecules in vivo as they localize in the target lesion or tissue.
Aposense hopes to start a global Phase III trial of its imaging product in support of marketing applications to be filed in the U.S. and Europe. Although the product is for imaging purposes, it is expected that it would be handled by drug reviewers.
If all goes well and the imaging product is commercialized and bringing in revenue, Aposense may consider separating the two sides of the business, Ashery said. Though, for now he said the company remains focused on developing both aspects under the same roof. In the field of targeted therapy, Aposense and Teva Pharmaceuticals are co-developing targeted anticancer agents that are comprised of an Aposense probe conjugated to generic cytotoxic agents to increase drug concentration in the tumor and reduce normal tissue toxicity.
The company is working on a set of small molecules that can detect and bind to cells undergoing apoptosis. The key ingredient in a chemotherapy agent is conjugated to Aposense's probe, and in preclinical models the targeted drug was shown to achieve several-fold increased efficacy over the original drug with several-fold less of a dose, and no side effects, Ashery said. Teva is funding development in that oncology collaboration, which covers several compounds, the first of which could reach the clinic in 12-18 months, Ashery told BioWorld Today.
Both the molecular imaging and therapeutic programs are based on Aposense's platform technology for targeting apoptosis (programmed cell death). The platform has the potential to be applied to many disease areas to generate products, one of the key drivers behind the value of the financing, Ashery said.
In other financing news:
• Bio-Path Holdings Inc., of Houston, said that it has signed an equity purchase agreement for up to $7 million with Lincoln Park Capital Fund LLC, an institutional investor based in Chicago. The company has the right to sell shares of its common stock to LPC over a 24-month period in amounts between $50,000 and $1 million up to an aggregate amount of $7 million, depending upon certain conditions. The company also reported that, prior to closing the LPC purchase agreement, it sold $273,000 of common stock and warrants in a Regulation D private placement offering to accredited investors.
• Cytheris SA, of Paris, has completed a $15 million Series D financing. In conjunction with the CDC Entreprises investment, Marie-Laure Garrigues, director of Investments at CDC Entreprises, will join the Cytheris board as an observer. Proceeds from the financing will be used to accelerate development in the company's IL-7 (CYT107) clinical programs in HIV, HBV, HCV and oncology. New investor, CDC Entreprises, of France, acting for the Strategic Investment Fund, participated in the round along with existing investors Bioam Gestion France, Caisse de dépôt et Placement du Québec, CDC Innovation, Crédit Agricole Private Equity and Forbion Capital Partners.
• Hana Biosciences Inc., of South San Francisco, entered into an agreement with Warburg Pincus and Deerfield Management for the sale of up to $100 million in preferred stock. The sale of $40 million of preferred stock closed Monday. The investors purchased 400,000 shares of Series A-1 preferred stock, at a per-share sale price of $100. In conjunction with the signing, the investors have the right to purchase up to $60 million of additional preferred stock under certain circumstances. Upon approval by the company's stockholders, the firm plans a reverse stock spit. Hana intends to use the net proceeds to advance its clinical development and commercialization programs, including regulatory activities related to Marqibo's new drug application.
• Harbor BioSciences Inc., of San Diego, entered an agreement with institutional investors to raise about $2.06 million in gross proceeds through the sale of about 5.9 million shares of its common stock and warrants to purchase approximately 3.5 million shares of its common stock. Harbor expects to receive total proceeds of about $1.8 million. The proceeds will be used for general corporate purposes. Chardan Capital Markets LLC served as the placement agent.