Onyx Pharmaceuticals Inc. is raising $185 million in the wake of several positive announcements about the prospects of kidney cancer drug Nexavar (sorafenib) in the treatment of advanced liver cancer.

Onyx (NASDAQ:ONXX) is offering 6.6 million shares at $28 per share, a slight discount to Wednesday's closing price of $28.31. Shares of the Emeryville, Calif.-based company dipped 57 cents on Thursday to close at $27.74.

Morgan Stanley & Co. Inc. and Merrill Lynch & Co. are serving as joint book running managers and underwriters for the offering, which is expected to close June 26. J.P. Morgan Securities Inc. and Banc of America Securities LLC also are acting as underwriters. Onyx will provide the underwriters with an additional 990,000 shares to cover any overallotments.

Net proceeds of $174.1 million, or $200.3 million if the overallotment is fully exercised, will serve to line Onyx's already healthy coffers. The company reported $261.8 million in cash, equivalents and marketable securities as of March 31, with operating expenses of only $15.7 million for the quarter. Nexavar net revenue, as recorded by Onyx's partner Bayer HealthCare Pharmaceuticals Inc., of Wayne, N.J., was $60.9 million in the first quarter, down slightly from $63.7 million for the fourth quarter of 2006.

While Onyx does not appear to be in desperate need of cash, the offering capitalizes on several recent bumps in the company's stock price. In February, Onyx's shares soared 95 percent after an interim analysis showed that Nexavar had met its primary endpoint of increasing survival in a Phase III liver cancer trial. When the full data were presented at the American Society of Clinical Oncology annual meeting in June, the stock popped again, reaching a 52-week high of $35.16. The data showed that patients treated with Nexavar had median over survival of 10.7 months, compared to 7.9 months in the placebo group. Based on these findings, Bayer submitted a European regulatory application and started preparing a U.S. application to expand Nexavar's label. (See BioWorld Today, Feb. 13 and June 5, 2007.)

In its SEC filing, Onyx listed a broad range of possible uses for the cash from its offering including clinical trials, research and development, sales and marketing, licensing, and general corporate purposes. Bayer and Onyx share the costs and profits of commercializing Nexavar in kidney cancer. In addition to lung cancer, they also are studying the drug in combination with chemotherapy for non-small cell lung cancer. A Phase III trial of the drug in melanoma failed to reach its primary endpoint. (See BioWorld Today, Dec. 5, 2006.)

Nexavar is a multi-kinase inhibitor that targets RAF kinase, VEGFR-1, VEGFR-2, VEGFR-3, PDGFR-B, KIT and FLT-3. Onyx's only other clinical product candidate is an early stage cell cycle kinase inhibitor.

In other financing news:

• IDM Pharma Inc., of Irvine, Calif., is raising $25 million in an offering of common stock and warrants at $3.50 per unit. The news pushed the company's shares (NASDAQ:IDMI) down 27 percent, or $1.12, to close at $3.02 on Thursday. IDM will offer 7.1 million shares of common stock along with five-year warrants to purchase an aggregate of 2.4 million additional shares at $4.06 per share. Rodman and Renshaw LLC served as the sole placement agent for the offering, which is expected to close June 25. Estimated net proceeds of $23.5 million will be used for working capital and general corporate purposes, including support of cancer drug MTP-PE (mifamurtide for injection, formerly known as Junovan), which is under regulatory review in the U.S. and Europe and received a negative opinion from the Oncology Drug Advisory Committee last month. (See BioWorld Today, May 10, 2007.)

• MicroIslet Inc., of San Diego, said it is raising $1 million through the sale of stock and warrants to accredited investors. The company agreed to sell about 2.6 million shares in the deal, and issue warrants for the purchase of 1.3 million shares at $0.60 per share. The warrants are exercisable for five years, starting in one year. The company is developing products the field of transplantation therapy for those with conditions requiring cell-based replacement treatments, with a focus on Type I diabetes.

• Ortec International Inc., of New York, raised $8.7 million, comprised of $5.8 million from a private placement of 580 shares of Series A Convertible Preferred Stock at a stated value of $10,000 per share; $2.7 million in bridge notes converted to 349 shares of A Preferred stock and warrants; and $0.2 million in bridge notes repaid. The company also negotiated a deal with Paul Capital Healthcare to exchange $43 million in liability for $10 million in A-1 and A-2 Convertible Preferred shares. The liability had resulted from a previous arrangement in which Ortec sold a percentage of future revenues on OrCel (Bilayered Cellular Matrix) to Paul Capital Healthcare. Proceeds will be used to generate data and file for Pre-Market Approval for OrCel in the treatment of venous stasis ulcers. Additionally, Ortec terminated its employment agreements with CEO Ron Lipstein and Chairman Steven Katz. Costa Papastephanou, the current president and chief operating officer, will serve as interim CEO. Shares of Ortec (OTC-PINK:OTCI) rose 8 percent, or 5 cents, to close at 70 cents on Thursday.

• Progen Pharmaceuticals Ltd., of Brisbane, Australia, completed a 1:9 entitlements offer for gross proceeds of A$34.1 million (US$28.8 million). The entitlements involved the issue of one share, worth A$5.74 to ASX-listed shareholders and US$4.75 to NASDAQ-listed shareholders, for every nine existing shares. Progen's shares closed on Wednesday at A$5.08 (ASX:PGL) and US$4.15 (NASDAQ:PGLA). The offer also included one free warrant, worth A$8.40 with an expiry date of May 28, 2010, for every two shares subscribed. The funding will support Phase III trials of anti-angiogenesis agent PI-88 in liver cancer, which are slated to start in the second half of 2007. (See BioWorld Today, May 4, 2007.)