Peregrine Pharmaceuticals Inc. is raising $22.5 million in a registered direct offering to fund development of products to treat cancer and hepatitis C virus.

The Tustin, Calif.-based company entered a deal under which it will sell 30 million shares from a shelf registration at 75 cents per share.

The deal is expected to close Tuesday. Peregrine's stock (NASDAQ:PPHM) fell 13 cents Friday, or 14 percent, to close at 77 cents.

Funds are earmarked primarily for clinical trials of bavituximab for the treatment of cancer and hepatitis C virus infection.

The company plans to initiate several Phase II studies evaluating bavituximab in combination with chemotherapy for the treatment of solid cancers, and to conduct clinical studies evaluating bavituximab for the treatment of chronic HCV infection, including in patients co-infected with HCV and HIV.

Funds also will support an ongoing Phase II trial of its tumor necrosis therapy Cotara for glioblastoma multiforme.

Bavituximab is a monoclonal antibody designed to bind to a basic component of the cell structure called a phospholipid, which is exposed only on the surface of tumor blood vessel cells or on cells infected with certain viruses, Peregrine said.

May 31, Peregrine reported positive results from a Phase Ib open-label trial of bavituximab in combination with chemotherapy, in advanced cancer patients with metastatic disease who had failed prior therapy.

Last week, the company began enrollment in an open-label Phase II trial in India to evaluate the safety and efficacy of Cotara in up to 40 patients with glioblastoma multiforme who have experienced a first relapse. Peregrine said positive results from that study, and ongoing trials in the U.S., would provide a foundation for moving into Phase III development with Cotara, a tumor-targeted monoclonal antibody attached to a radioactive isotope substance.

Rodman & Renshaw LLC was placement agent for the stock sale.

Peregrine in March reported that it had about $20.1 million in cash as of Jan. 31, the end of its third quarter. Its net loss for that quarter was $5 million, while the net loss for the first nine months of its year was $15.6 million. The company had about 195.3 million shares outstanding as of March 31.

In other financing news:

• EpiCept Corp., of Tarrytown, N.Y., entered definitive agreements with institutional investors to raise $10 million through the sale of common stock and warrants. EpiCept will issue about 5.1 million, priced at $1.95 each, and five-year warrants to purchase up to about 2.56 million shares at an exercise price of $2.93 per share. The warrants will not become exercisable until six months after the closing. Following the private placement, EpiCept will have about 37.5 million common shares outstanding. The company is developing products for treating cancer and pain. Its stock (NASDAQ:EPCT) fell 29 cents Friday, or 11.9 percent, to close at $2.15.

• OxThera AB, of Uppsala, Sweden, raised SEK150 million (US$21.9 million) in a financing round. Funds primarily will be used to fund pivotal trials of Oxabact and trials of Oxazyme. Both products are designed to degrade oxalate. Oxabact, an orally delivered formulation of a recombinant enzyme, is expected to enter pivotal Phase II/III trials in September for treatment of a rare genetic disease, primary hyperoxaluria. Oxazyme is expected to enter Phase I studies in December for the prevention of recurring calcium-oxalate kidney stones due to secondary hyperoxaluria. Existing investors HealthCap, Scandinavian Life Science Venture and Q-Med AB were joined by Industrifonden and a private investor in the financing.

• Panacos Pharmaceuticals Inc., of Watertown, Mass., closed a $20 million term loan agreement today with Hercules Technology Growth Capital Inc. Hercules advanced $10 million to Panacos upon closing, and the company plans to draw the remaining $10 million prior to Sept. 30. Under the agreement, only interest payments will be required for the first 12 months. Thereafter, the balance will be payable in equal monthly installments of principal and interest for 30 months. The first tranche of the loan will carry an interest rate of 11.2 percent. As part of the deal, Hercules received a five-year warrant to purchase 646,900 shares of the Panacos common stock at $3.71 per share.

• Proteome Sciences plc, of Cobham, UK, entered into a further loan agreement with its CEO, C.D.J. Pearce, under which he will increase the existing loan facility available to the company from £4 million to £6 million (US$12 million). The loan carries an interest rate at 2.5 percent above the base rate of Barclays Bank plc, and is convertible into ordinary shares at the lower of the market price on the date of conversion or the average price over the lowest consecutive 10-day trading period since June 29. The company said funds should allow it to complete the out-licensing of its isobaric tandem mass tags TMT technology, and to see it through to the revenue anticipated from its biomarker portfolio.

• Barrier Therapeutics Inc., of Princeton, N.J., said it received a $12 million senior secured credit facility from Merrill Lynch Capital to finance ongoing working capital requirements. Credit available under the three-year revolving loan facility will be a percentage of Barrier's accounts receivable due from third-parties plus a percentage of the company's inventory, with an interest rate equal to the one-month LIBOR rate at draw plus 300 basis points. The company issued no warrants or other dilutive securities in the deal.

• Med BioGene Inc., of Vancouver, British Columbia, closed the second and final tranche of its private placement, issuing an aggregate of 677,500 units priced at C45 cents each for gross proceeds of about C$305,000 (US$386,870). Each unit consisted of one common share and one common share purchase warrant. The company's first tranche closed June 1 and resulted in gross proceeds of about C$3.1 million. Med BioGene develops genetic biomarkers to improve screening, diagnosis, prognosis and treatment decisions for patients with certain cancers and cardiovascular disease.