BioWorld International Correspondent

The management of Pharmexa A/S is starting to scout around for whatever "strategic alternatives" may be available to the company, following the completion of a rights issue that grossed DKK91.2 million (US$18 million).

Copenhagen, Denmark-based Pharmexa issued 18,237,545 new shares, priced at DKK5 per share. After expenses, DKK80.2 million will flow into the firm's coffers.

However, that is well below the minimum DKK300 million the company needed to maintain its present strategy, as it outlined in a fundraising prospectus published Jan. 9. In that document, it indicated that it would offer a maximum of 69,090,658 shares, which would have yielded gross proceeds of DKK345.5 million.

"The way that the [preemption] rights were trading and the way the stock price performed during the fundraising process . . . we had expected more," Pharmexa CEO Jakob Schmidt told BioWorld International. "We are grateful for the money we got," he added. "In these markets, DKK90 million is still a decent amount of money. It's something to build on. Now we will take a few weeks to consider the options."

Schmidt was unwilling to speculate on what those options might be, but the company plans to communicate its intentions following a board meeting it will hold Feb. 18.

A combination of factors weakened the company's position in recent months. With DKK79.3 million in the bank on Nov. 30, rising speculation that the company would be forced to seek more funds coincided with a worsening outlook on global stock exchanges. The situation was exacerbated by Pharmexa's weakening share price necessitating a technical adjustment to the structure of the company's share capital.

Interim data from a Phase II clinical trial of the company's liver cancer vaccine "was seen in the markets as a very negative thing," Schmidt said, even though the company had expected the results to be inconclusive at that point. The final data are not expected until late in the second quarter.

The same product, a telomerase peptide vaccine, also is undergoing testing in two Phase III clinical trials in pancreatic cancer. The first of those, a 520-patient head-to-head study with gemcitabine (Gemzar), marketed by Indianapolis-based Eli Lilly & Co., is due to report in the second half of 2009. The second study will report in 2011.

However, cancer immunotherapy is as yet an unproven approach, and the wider field suffered a setback last year when Seattle-based Dendreon Corp. was told by the FDA that additional clinical data were needed to support its BLA for the prostate cancer treatment Provenge.

"No approval has been given yet for products that rest on this technology," Frank Anderson, analyst at Jyske Bank, in Silkeborg, Denmark, told BioWorld International. "We think it's going to be very difficult for them to launch a product."

It also will be difficult for Pharmexa to find a buyer for all or part of the company, he said, as the firm has attracted little interest, despite its recent low valuation. That valuation dropped further Tuesday, following the completion of the rights issue. The company's share price slid by almost 15 percent to DKK4.82 on the Copenhagen Stock Exchange by late afternoon, down from the previous day's close of DKK5.65. That values the company at around DKK200 million. The new shares will commence trading today.