BioWorld International Correspondent
LONDON - Ark Therapeutics Group plc plans to raise £35.4 million (US$73.8 million) in an oversubscribed placement, providing funds to complete development and establish sales and marketing for Cerepro, a treatment for malignant glioma that is on course to become the first gene therapy product to be approved by a Western regulator.
The money also will see through the Phase III development of another gene therapy product, Trinam for preserving access grafts in hemodialysis patients, and of Vitor, a small-molecule treatment for cancer cachexia.
At the same time, the London-based company intends to bring second-generation gene therapy products based on its Scavidin and Trinam technology platforms into the clinic.
Ark is placing 35.6 million new shares at £1.05 each, a 2.8 percent discount to the closing price on Monday.
"We are raising this money on the back of significant results and achievements," CEO Nigel Parker told BioWorld International.
Although the company did not need to raise funds, several investors encouraged the move. "Our preclinical portfolio is at the point where it can be taken into the clinic, and several investors thought they would like to see the early stage clinical portfolio strengthened," Parker said.
The fact that institutional investors are prepared to put money into preclinical products shows the value of biologic products is beginning to crystallize, Parker added.
"It is becoming clearer that advanced biologics, for example gene therapies, stem cells, cell replacement therapies, and so on, are the future, and we are ahead of the game," he said.
Now that such biologics are starting to be validated, investors will favor them over small-molecule treatments.
"With biologics, if you go into a patient with advanced disease with a potent agent and it works, there is a big efficacy signal. With small molecules, Phase I is little more than toxicity testing."
Approximately 50 percent of the new money will be devoted to progressing the final-stage development of Cerepro, Trinam and Vitor, and 25 percent toward accelerating the progress of up to three of its early phase gene-based medicines into Phase I/IIa studies.
The more advanced opportunities in the preclinical portfolio are Scavidin for the treatment of inoperable glioma, Trinam variants in refractory angina and foetal growth restriction, and a new collagen delivery device for delivering the VEGF gene variant used in Trinam in coronary artery bypass surgery.
In addition, Ark wants to advance work on Neuropilin 1 peptides as anticancer compounds, getting an optimized molecule ready for Phase I, at which point it will be partnered.
It is intended also to plough around £3.5 million toward the development and completion of Ark's manufacturing facilities in Kuopio, Finland, to manufacture Trinam in addition to Cerepro, and for the development of the GMP manufacturing processes and facilities for the production of lentiviral vectors for use with Scavidin.