Inovio Biomedical Corp. raised $16.2 million in a registered direct offering of 4.6 million shares at $3.52 per share to institutional and accredited investors in Singapore and North America.

The sale price represents a slight discount to the San Diego-based company's Tuesday closing price of $3.70. Shares (AMEX:INO) traded down 9 cents on Wednesday to close at $3.61.

"This financing stretched our runway closer to three years," President and CEO Avtar Dhillon told BioWorld Today. Inovio ended the first quarter of 2007 with $19 million in cash and short-term investments, and Dhillon estimated the company's burn rate at about $1.1 million per month given a net loss of $14.5 million in 2006.

Prior to the current offering, most of Inovio's money was devoted to supporting late-stage clinical trials with the company's MedPulser system for the treatment of cancer, Dhillon said. The MedPulser delivers a dose of the generic anticancer drug Bleomycin using Inovio's core electroporation technology, which uses a pulse of electrochemical energy to open pores in cell membranes so that therapeutic molecules can enter.

"We can increase the activity of Bleomycin 3,000 to 5,000 times by giving the electrical pulse," Dhillon said.

In Europe, the MedPulser has been classified as a device and given a CE Mark. To demonstrate efficacy and cost savings, Inovio is conducting two premarketing studies prior to launch. A 100-patient study in head and neck cancer is expected to complete enrollment in the next few weeks, while a 100-patient study in skin cancer should follow suit by the end of the third quarter. Inovio currently is seeking a partner with which to launch the system in Europe next year.

In the U.S., the MedPulser has been classified as a combination product. Although Inovio will file a PMA rather than an NDA, CDER will provide consultation. To support that application, Inovio is conducting two Phase III trials in head and neck cancer. Dhillon estimated the trials will require 18 months to complete enrollment of 400 patients, and then eight months of follow-up after treatment.

Inovio also completed enrollment in a Phase I/II trial with the MedPulser in breast cancer and expects to present data at a scientific conference within the next two months.

With enrollment in most of its MedPulser trials nearing completion, Dhillon projected that expenses associated with the program will begin to decrease. That will allow Inovio to spend some of the proceeds from the current offering on additional applications of its electroporation technology. While the MedPulser could be used to deliver other cancer drugs such as 5-fluorouracil or a taxane, Inovio's second area of focus is on the delivery of DNA.

All of Inovio's 12 DNA vaccine and gene delivery programs currently are managed through partners such as Wyeth Pharmaceuticals Inc., which signed up for a potential $64.5 million deal late last year. The most advanced programs, all in Phase I trials for various types of cancer, are partnered with Merck & Co. Inc., Vical Inc., the University of Southampton and the H. Lee Moffitt Cancer Center & Research Institute. The latter two are expected to present preliminary data next week from their first-in-man clinical studies using electroporation for DNA delivery. (See BioWorld Today, Nov. 8, 2006.)

Inovio and its partners hope to "replace viruses and lipids [as DNA delivery devices] with the novel method of electroporation," Dhillon said. He added that electroporation is simpler and less expensive than existing approaches, with the added benefit of providing adjuvant activity.

Moving forward, Inovio plans to maximize value by internally developing its DNA delivery programs through preclinical or early clinical trials before licensing them. The company will obtain DNA sequences through either licensing or the use of nonproprietary sequences available in the public domain.

With the proceeds from the current financing in hand, "we will be ready to implement certain [DNA delivery] programs immediately," Dhillon said.

In other financing news:

• pSivida Ltd., of Perth, Australia, said it is redeeming in full the convertible note held by Sandell Asset Management Corp. in a single payment of $13.7 million (A$16.5 million), in accordance with the early redemption terms announced April 4. A 30-day irrevocable notice of redemption has been issued to the holder of the company's only other remaining convertible note. With a payment of $880,000, as adjusted for any conversions occurring over the next 30 days, the company will have retired all of its debt.