Staff Writer
Canada's Thallion Pharmaceuticals Inc. got an early Christmas gift, an infusion of cash and a partnership that will jumpstart its pipeline drug for E. coli infection, a program that had languished for nearly a year for lack of funding.
The Montreal-based company last year decided to stop development on a drug for Shiga-toxin E. coli (STEC) bacteria until it found a partner. Thallion was dealt another blow this week when it said it would have to stop development on its brain cancer program after a study committee found that drug candidate TLN-4601 showed no meaningful response in patients with glioblastoma multiforme.
But Thallion got some much needed holiday cheer: Its wishes were granted for a partner and a windfall of cash, critical for reviving the languishing E. coli program.
The company sold its Caprion Proteomics Inc. subordinated promissory note back to Caprion for an immediate cash payment of $1.85 million. The promissory note was originally issued in July 2007 as part of the proceeds under the sale of its wholly owned proteomics business. Thallion will continue to retain its roughly 16 percent equity interest in Caprion.
Separately, Thallion and French firm LFB Biotechnologies have entered a deal worth a potential $142.5 million to develop Shigamabs, monoclonal antibodies designed to bind specifically and exclusively to the Shiga toxin 1 and Shiga toxin 2 toxins secreted by STEC bacteria. The dual antibody approach enables Shigamabs to address any cases where one and/or the other Shiga toxin is present and also overcomes the inability of existing diagnostic technology to distinguish between cases caused by only one of the two toxins.
The companies have signed a letter outlining the terms of the agreement, but the actual definitive agreement to seal the deal is expected to be completed in the next four to six weeks.
Under the terms, Thallion would receive an up-front payment of about C$2.3 million (US$2.5 million) and about C$150 million (US$140 million) in additional payments plus tiered, double-digit royalties based on product sales.
LFB Biotechnologies will receive commercial rights to Shigamabs for Europe and South America, while Thallion retains the rights for North America and the rest of world. Thallion will retain primary responsibility for the conduct of the clinical program, whereas LFB Biotechnologies will be responsible for the manufacture and supply of Shigamabs for both clinical study and commercial sale.
"With a partner, now we can afford to move that program forward and not be at risk of running out of cash," Michael Singer, chief financial officer at Thallion, told BioWorld Today. "We are very excited to end 2009 on this foot," he said. The recent cash injections will extend the company's cash runway well into the future, said Singer, adding that he did not foresee any additional fundraising in the near term.
The company reported having just over $12 million in cash in the third quarter. Year-end financial results are due in February.
Thallion has completed multiple preclinical studies and four Phase I trials evaluating the efficacy and safety of Shigamabs. The trials demonstrated that Shigamabs are safe and well tolerated when administered both individually and in combination at various dose levels. No serious adverse events were experienced in any of the 50 healthy volunteers that have received the drug.
Thallion and LFB plan to move toward the start of a Phase II study of Shigamabs in South America.
STEC infections are primarily foodborne bacterial infections that affect about 314,000 people annually in the industrialized world. Shigamabs have been granted orphan drug status both in the U.S. and in Europe. There are no approved products available for the treatment of STEC infections.
Shares in Thallion (TO:TLN) were up C2 cents, or 22 percent, closing at C11 cents.
In other financing news,
Arrowhead Research Corp., of Pasadena, Calif., has raised about $3.2 million in gross proceeds from a private placement of about 5 million units. Units were sold for 63.4 cents each, 12.5 cents higher than the 50.9 cents closing bid price of the company's common stock on Nasdaq Dec. 11, the date of the sale. Each unit consisted of one share of newly issued common stock and one warrant to purchase an additional share of common stock at an exercise price of 50.9 cents per share.
OctoPlus NV, of Leiden, the Netherlands, has completed an equity raising of 4 million (US$5.7 million) through a private placement of ordinary shares with new and existing investors. In addition, the company obtained a new credit facility of up to 2 million. The financings give the firm a financially secure future, the company said. In connection with the offering, OctoPlus said that it has obtained a new credit facility at more favorable conditions from Fortis Bank Nederland of up to 2 million, which replaces the company's existing credit facility.
Spectral Diagnostics Inc., of Toronto, and BioMS Medical Corp., of Edmonton, Alberta, said that BioMS Medical and a syndicate of investors have invested $14 million in Spectral to advance toraymyxin, a treatment for severe sepsis, toward regulatory approval and commercialization in the U.S. A pivotal U.S. trial is expected to start in the first half of 2010. In connection with the financing, BioMS and Spectral also agreed to enter a three-year $3 million services agreement at closing, whereby BioMS will provide clinical, regulatory and capital market consulting services to Spectral. The transaction is expected to close in early February 2010. Spectral's board unanimously supports the proposed transactions and recommends that shareholders vote in favor of them.