On the heels of a stock price increase due to positive Phase III data, Dyax Corp. decided to raise $38.5 million in a public offering of 10.5 million shares at Thursday's closing price of $3.67 per share.

Investors seemed pleased with the decision. Dyax's shares (NASDAQ:DYAX) rose 11.7 percent, or 43 cents, Friday to close at $4.10. The increase made up for the 39 cent drop last Monday when the Cambridge, Mass.-based company first filed its offering.

Dyax increased the size of the offering, which was originally 9.5 million shares, and will make an additional 1.6 million shares available to cover any overallotments. UBS Investment Bank is acting as the sole book-running manager for the offering, with Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Lazard Capital Markets LLC acting as co-managers.

Proceeds will be used to drive two ongoing trials with lead product DX-88 (ecallantide), a recombinant protein that inhibits human plasma kallikrein, a subtype of serine protease involved in inflammation and coagulation pathways.

In April, Dyax started its second Phase III trial with DX-88 in hereditary angioedema, an acute inflammatory condition characterized by severe swelling. Earlier that month, positive data from the first Phase III trial sent shares of Dyax soaring to a 52-week high of $6.95.

If the second trial garners similarly positive results, Dyax anticipates gaining FDA approval in late 2008. Dyax also is conducting an on-going, open-label follow-on study of DX-88 in hereditary angioedema. (See BioWorld Today, April 16, 2007.)

In May, Dyax also initiated a Phase II trial of DX-88 for the prevention of blood loss during on-pump cardiothoracic surgery, including coronary artery bypass graft surgery and heart valve replacement or repair procedures.

During those types of surgeries, a pump is used to maintain circulation during the procedure, which can result in systemic inflammatory responses and significant blood loss. The Phase II trial will evaluate the ability of low and high doses of DX-88 to improve blood loss-related measures such as chest tube drainage and transfusion requirements.

Dyax's two target indications for DX-88 are not without competition. Although there are no FDA-approved drugs for acute attacks of hereditary angioedema, late-stage programs are under way at Lev Pharmaceuticals Inc., ZLB Behring, Pharming Group NV and Jerini AG in partnership with Abbott Laboratories. In the surgery indication, Bayer AG markets a plasma kallikrein inhibitor known as Trasylol (aprotinin).

Yet Dyax believes DX-88, which was discovered in-house using the company's phage display technology, may offer higher affinity and specificity than the competition, potentially increasing safety and efficacy.

Proceeds from the offering also will be used to develop preclinical and research compounds discovered using the phage display technology, as well as for working capital and general corporate purposes.

Preclinical candidates include DX-2240, a fully human monoclonal antibody targeting the Tie-1 receptor on tumor blood vessels, and DX-2400, a fully human monoclonal antibody targeting matrix metalloproteinase 14 (MMP-14) on tumor cells and tumor blood vessels. Dyax also has 12 internal product candidates in early stage research and agreements with more than 70 collaborators for licenses to the phage display technology.

The offering will supplement the $60.9 million in cash, equivalents and short-term investments Dyax had as of March 31. During the first quarter, the company burned $16.6 million on operations, but received $17 million from Genzyme Corp. as part of a termination agreement for a previous collaboration concerning DX-88. Dyax now holds all rights to the compound.

In other financing news:

Nuvo Research Inc., of Mississauga, Ontario, completed its previously announced bought deal public offering. The company sold 100 million units for C20 cents per unit, raising gross proceeds of C$20 million (US$18.9 million). Each unit consists of one common share and one-half of one two-year warrant to purchase an additional share at C30 cents. Proceeds will be used to fund studies required to support the resubmission of a new drug application for the topical nonsteroidal anti-inflammatory Pennsaid in osteoarthritis, as well as for other purposes. Nuvo anticipates completing all necessary studies and filing a complete resubmission in the first half of 2009.

• NexGenix Pharmaceuticals Holdings Inc., of New York, closed a $3.9 million nonbrokered Series B round to progress offshore clinical trials of its lead compound, NX101, in dermal neurofibromas in neurofibromatosis (NF) Type I and to proceed with the development of a targeted treatment for NF Type II. The company plans to soon seek an investigational new drug application in NF Type I.