EntreMed Inc. bolstered its cash position with a $20 million loan to support ongoing clinical development of cancer and inflammatory disease drugs.
The Rockville, Md.-based firm entered a secured loan agreement with a syndicate led by GE Healthcare Financial Services and including Merrill Lynch Capital and Oxford Finance Corp. In a press release, EntreMed President and CEO James Burns said the nondilutive financing vehicle should fund the company's "clinical development expenses into 2009."
Proceeds primarily will be put toward the company's most advanced programs - Panzem NCD, MKC-1 and EMND-1198 - and for moving two earlier-stage programs to the clinic. Panzem NCD (2-methoxyestradiol) is in multiple Phase II trials in cancer, including a study in patients with glioblastoma multiforme. At the recent ASCO meeting in Chicago, EntreMed reported data from an ongoing trial showing that, of the 27 patients enrolled, one had a partial response and seven had stable disease. Panzem NCD also is being tested in carcinoid tumors, hormone-refractory prostate cancer and ovarian cancer.
The company's also in Phase II with MKC-1, an oral, cell-cycle regulator, in metastatic breast cancer and non-small-cell lung cancer, and a Phase I trial is ongoing in leukemia. And ENMD-1198, a tubulin-binding agent, is in Phase I development in advanced cancers. Its preclinical pipeline includes ENMD-2076, a dual-acting Aurora-angiogenesis inhibitor for cancer, while EntreMed also is investigating Panzem for inflammatory disease, starting with rheumatoid arthritis.
Under the loan agreement, collateral will include EntreMed's interest in royalty revenues on sales of Celgene Corp.'s multiple myeloma drug Thalomid (thalidomide). EntreMed licensed the thalidomide analogue program to Warren, N.J.-based Celgene in 2003.
EntreMed, which posted a net loss of $7.9 million, or 10 cents per share, for the second quarter of 2007, had cash totaling $38 million as of June 30. The company's stock (NASDAQ:ENMD) closed at $1.17 Monday, up 1 cent.
In other financings news:
• Devgen NV, of Ghent, Belgium, signed a deal in which St. Louis-based Monsanto Co. agreed, subject to certain customary conditions, to subscribe to about 1 million Devgen shares at €17.22 (US$23.88) per share for a total of €18 million (US$25 million). The investment represents 5.9 percent of Devgen's outstanding capital, and Monsanto's role as a shareholder is expected to complement the companies' ongoing collaboration and technology exchange agreements. In February, the firms entered a five-year agriculture research and development deal, which involved a funding commitment from Monsanto to support Devgen research. At the same time, the companies broadened their relationship so each firm could focus on crop areas of interest. The deal is expected to close no later than November.