By Lisa Seachrist
Looking to accelerate its clinical development efforts, Ilex Oncology Inc. raised $135 million in a private placement of stock.
The company sold 3 million shares for $45 a share to about 20 investors. The sale price represented a 7 percent discount to the market price on Thursday. Prudential Vector Healthcare Group, of New York, served as placement agent. The stock will be registered soon with the SEC.
Once the registration is complete, San Antonio, Texas-based Ilex will have 24.7 million shares outstanding and approximately $200 million cash on hand.
We feel we have made a major step forward in becoming a leading oncology-focused pharmaceutical company, said Ann Stevens, director of investor relations for Ilex. We hope to have a product on the market soon, and we have a deep pipeline in oncology products. Now, with our cash position, we can consider pursing acquisitions of late-stage products.
Stevens said the private placement was initiated in response to an Ilex investors need to liquidate 1.25 million shares of Ilex stock. The company isnt naming the selling stockholder or disclosing the stockholders reason for selling shares. However, rather than have such a volume of shares dumped on the market, the company attempted to find investors interested in picking up the shares. As a result, Stevens said the company found a demand for Ilex stock and decided to issue 3 million new shares.
The group of investors purchased in total 4.25 million shares and the selling stockholder received approximately $56.5 million. Ilex will not receive any of the proceeds from the sale of proceeds by the selling stockholder.
In December, Ilex and Millennium Pharmaceuticals Inc., of Cambridge, Mass., filed a biologics license application for Campath, a monoclonal antibody developed to combat chronic lymphocytic leukemia (CLL). Ilex developed that product in a 50-50 joint venture with LeukoSite Inc., also of Cambridge. Millennium purchased LeukoSite in December. (See BioWorld Today, Dec. 27, 1999, p. 1.)
Because Campath has been granted fast-track status, FDA is under a statutory deadline to make a decision on the product in six months. Stevens said the companies expect a decision mid-year.
In addition to Campath, Ilex has two oncology products in clinical trials. Ilex has begun patient accrual in a large Phase III study to test whether eflornithine can prevent the recurrence of superficial bladder cancer. The company has four Phase II trials for its drug, ILX-295501, a diarysulfonylurea compound, in melanoma and ovarian, kidney and non-small-cell lung cancers.
The company also has one non-oncology drug, Oxyprim, in a pivotal trial as a treatment for gout in patients who cant tolerate the standard therapy, allopurinol.
The company also plans to use the proceeds of the private placement to bring two of its seven angiogenesis inhibitors to the clinic. Stevens said the company hopes to move two of those inhibitors into Phase I clinical testing before the end of the year.
Ilex is focused on accelerating the development of drugs for the treatment and prevention of cancer. In addition to advancing its portfolio of anticancer drugs, Ilex offers drug development services on a contract basis to pharmaceutical and biotechnology companies through its Ilex Oncology Services subsidiary.
We see the oncology service business as a strategic asset, Stevens said. We get to see a lot of drugs developed and that makes us better at developing our own pipeline.
Ilex stock (NASDAQ:ILXO) closed unchanged Tuesday at $50.