BioWorld International Correspondent

Shares in Micromet Inc., dropped almost 7.5 percent Monday, from $3.88 to $3.59, on news that it agreed to raise approximately $8 million in a discounted share placement with funds managed by NGN Capital LLC.

Under the agreement, Micromet, of Carlsbad, Calif., would sell NGN Capital 2.2 million shares, priced at $3.60 per share, which represents a discount of 7.8 percent to the stock's closing price last Friday, immediately before the agreement was disclosed.

Funds managed by New York-based NGN Capital also will receive warrants to purchase 555,556 additional Micromet shares at $5 per share. Peter Johann, a managing general partner at NGN, will join the company's board.

Micromet currently has 31.2 million shares outstanding.

The company styles itself as a transatlantic biotechnology company, following the stock-based merger between Munich, Germany-based Micromet AG and Carlsbad-based CancerVax Inc., which was completed on May 5. That transaction gave Micromet AG shareholders 67.5 percent ownership of the enlarged entity, while CancerVax shareholders gained a 32.5 percent interest.

The company, which, on a pro forma basis, held $53.3 million in cash and equivalents on March 31, will use the additional funds for its ongoing research and development programs and to pay for the transfer of its U.S. headquarters from California to a new undetermined location on the East Coast. "It will definitely be the East Coast because there's a better overlap between European and U.S. working time there," company spokeswoman Evelyn Wolf told BioWorld International.

All but a handful of Micromet's 95 employees originally were employed by the German component of the company. Munich remains its center for R&D and European clinical development, while it has located finance, investor relations and business development functions in the U.S. "Over time, we will certainly build up clinical development for the U.S. side," Wolf said.

The company's lead drug candidate, MT201 (adecatumumab), a monoclonal antibody targeting the tumor antigen epithelial cell adhesion molecule, is undergoing Phase II clinical trials in prostate and breast cancers. Those are due to be completed by the end of the year, Wolf said. Micromet's partner, Serono AG, of Geneva, would assume development responsibility, under an agreement signed in December 2004.

According to that pact, Micromet received an up-front payment of $10 million and would receive total milestones of $138 million should MT201 gain approval in three indications. However, Micromet retains rights to participate in further development and commercialization of the molecule in exchange for a share of the profits.

The company also has commercialization rights built into an agreement covering its second clinical stage drug candidate, MT103, which is in development for B-cell lymphoma. MedImmune Inc., of Gaithersburg, Md., has North American rights to the product, while Micromet has retained rights for the rest of the world.

MT103 was developed using the company's BiTE technology, a method of harnessing the cytotoxic properties of T cells by combining antibody fragments that recognize T-cell and tumor antigens in a single polypeptide chain. The resulting artificially induced immunological synapse functions in the same way as those generated naturally, the company said.

Micromet does not plan to out-license the technology to third parties, but it will seek further development agreements, retaining some commercialization rights. "There are opportunities being built up," Wolf said.