BioWorld International Correspondent

Medivir AB grossed approximately SEK224.5 million (US$31.9 million) from a heavily discounted share issue directed at existing shareholders. And, in a separate move, the company disclosed that it has gained an equity position in a Chinese pharmaceutical firm through out-licensing rights in China, Taiwan, Hong Kong and Macao to its preclinical HIV drug candidate, MIV-160, to Guangdong Lantai Viewland Pharmaceutical Co. Ltd.

The share issue comprised 7,741,566 new Class B shares, priced at SEK29 per share. The company's share price had closed at SEK58 immediately before the funding plan was disclosed last Dec. 6. Existing shareholders were entitled to subscribe for three of the new shares for every five shares held previously. The new stock is expected to be trading on the Nordic Exchange in Stockholm, Sweden, beginning Feb. 28. Carnegie Investment Bank AB in Stockholm advised Medivir on the transaction.

The fund raising coincided with a plan to streamline the Huddinge, Sweden-based company's operations and to focus its resources on priority programs. As part of that initiative it announced the shut-down of its UK research and development facility at Chesterford Research Park, near Cambridge.

That process already has been completed, said Rein Piir, chief financial officer and head of investor relations at Medivir, although the company has retained a small business development team and some specialist researchers in the UK.

The new injection of cash almost doubles its cash reserves. The company reported SEK246.9 million in cash and short-term investments as of Oct. 30. "We're funded until beyond the beginning of 2009, assuming we won't get any milestones or downpayments - nothing. That's probably a conservative way of seeing things," Piir told BioWorld International.

Its lead program, Lipsovir, a proprietary formulation of the antiviral drug acyclovir and the steroid cortisone, is undergoing a Phase III clinical trial in the U.S. and Canada, but remains unpartnered. The study is scheduled to be completed later this year, and the company wants to have the results in hand before signing any deal.

"We are waiting for the data to come, but we will probably start the [partnering process] ahead of the data just to maintain the momentum and to maintain speed," Piir said.

The company has several other partnerships underway that also are potential revenue earners. Since December, it has banked two milestone payments worth a combined €5 million, from Tibotec Pharmaceuticals Inc., a subsidiary of New Brunswick, N.J.-based Johnson & Johnson Co. Those payments were triggered by the entry into the clinic of a protease inhibitor in development for Hepatitis C therapy.

Other drug development agreements with potential milestones attached include a deal in HIV with New York-based Bristol-Myers Squibb Co.; a second deal with Tibotec, involving a drug candidate in development for HIV and hepatitis B infection; an agreement with San Francisco-based Epiphany Biosciences Inc. on a Phase II treatment for Varicella zoster virus; and a deal on two anti-HIV compounds, one of which has activity against cytomegalovirus, with Presidio Pharmaceuticals Inc., also of San Francisco.

All of those latter agreements involve a portfolio of polymerase inhibitors that Medivir put on the auction block, following a decision in 2005 to exit the field and focus on protease inhibition.

MIV-160 is the last remaining drug candidate left in the portfolio, but as yet no agreement has been signed for territories outside those covered by the latest agreement with Guangdong Lantai Viewland Pharmaceutical. Medivir would receive royalties on eventual sales of MIV-160, but it has received an equity stake in the company in lieu of interim cash payments.

Asked if the compound is likely to attract licensees in other territories, Piir said, "Probably not. There are no ongoing discussions at present."

Medivir has several other protease inhibition programs in preclinical development. The most advanced of those involves MIV-710, a Cathepsin K inhibitor with potential application in osteoporosis, osteoarthritis and bone metastases.

The company's share price closed Monday at SEK57.75, off by SEK0.75 from its previous close.

In other financing news, Pharmexa A/S, of Hørsholm, Denmark, grossed DKK64 million (US$11.1 million) in a private placement of 3,765,155 shares, priced at DKK17 per share. The company said it would use the cash to develop its portfolio of cancer vaccines. Its shares closed Monday at DKK17.80, up DKK0.56 from Friday's close.