Tissue repair company BioSyntech Inc. plans to raise C$10 million (US$8.8 million) in a private placement to support clinical trials of its three lead products.
The Laval, Quebec-based company said it retained the services of Desjardins Securities Inc., of Montreal, and Dundee Securities Corp., of Toronto, to place 23.8 million units at C42 cents each.
Each unit will consist of one common share and one-half of one common share purchase warrant, with each whole warrant entitling the holder to purchase for up to three years a common share for C65 cents. The warrants may expire earlier if BioSyntech’s shares reach C$1.30 or higher for 10 consecutive trading days.
The stock (CDNX:BSY) fell C2 cents Wednesday to close at C49 cents.
Desjardins and Dundee also retain an option to acquire up to 11.9 million additional units at C42 cents to accommodate additional investors. If exercised in full, gross proceeds to BioSyntech would rise to C$15 million.
The company could not be reached for comment Wednesday, but it said in a statement that the proceeds would cover the clinical trials of its three lead products, as well as general working capital purposes.
BioSyntech’s platform technology is a family of hydrogels (BST-Gel) that can be injected or applied to a local site to repair damaged tissue such as cartilage, bone and chronic wounds. The hydrogels are liquid at low temperature and solid at the human body temperature. Their therapeutic effect can be targeted to last anywhere from a few days to several months.
The three lead products in development include BST-CarGel, a biodegradable gel for cartilage repair; BST-InPod for heel pain relief; and BST-DermOn for chronic wound healing. BioSyntech also is working at the preclinical stage on BST-Ossifil for bone filling, BST-Ossifix for bone structural support and BST-Disc for intervertebral disc restoration.
The technology is applied topically or through an injection directly to a specific site. BST-CarGel, for instance, is mixed with a patient’s blood at the time of surgery and applied to the lesion. Animal studies have shown that the product fills and sticks to the cartilage lesion and acts as a 3-dimensional scaffold. During the regeneration process, BST-CarGel is degraded as the cartilage naturally regenerates.
BioSyntech currently is enrolling 80 patients in a randomized study comparing BST-CarGel with microfracture in a pivotal trial. All subjects will follow a 12-week physiotherapy regimen. The primary endpoint is cartilage repair at 12 months, defined as a composite of the quantity and quality of the repair tissue measured through magnetic resonance imaging. Other endpoints include knee-related pain, stiffness and function, as well as overall quality of life assessed through questionnaires.
The company plans to file investigating testing authorization submissions with Health Canada in the next two quarters to start clinical trials of its other two lead products. It intends to launch BST-InPod and BST-DermOn in 2007, and BST-CarGel in 2008, in both Canada and Europe. U.S. approvals are expected in 2008 and 2009, respectively.
The company also has developed the diagnostic Arthro-BST, which is used during arthroscopy to assess the quality of cartilage. And, at the early stages of development, it is researching various therapeutic delivery applications, including vehicles for anticancer drugs or cell therapies.
Therapies that can be delivered through BST-Gel injections include water-soluble and -insoluble molecules, peptides, proteins and growth factors, as well as genes and cells.
Since its founding in 1995, BioSyntech has filed 126 patent applications, 39 of which have been granted. It currently has about 30 employees.
As of Dec. 31, BioSyntech had C$3.8 million in cash and cash equivalents.
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