Ensuring its ability to bring in capital during the next two years regardless of market conditions, Cell Therapeutics Inc. signed a committed equity financing deal with a Parisian bank for up to $72 million.
Under the terms of the step-up equity financing agreement, Societe Generale will purchase up to €45 million of new company shares over a 24-month period, with the option to increase that amount to €60 million (US$72 million), and would sell those shares on the Italian market. The arrangement will allow Cell Therapeutics the flexibility to raise funds as needed, and the company is not obligated to draw down any of the funds.
The Seattle-based company, which could not be reached for comment, reported a net loss of $53.2 million for the first quarter - $27.3 million from operations and the remaining $30 million coming from debt-related costs, a settlement payment and restructuring expenses. As of March 31, it had cash and short-term investments totaling $50.3 million, but added about $31.2 million in net proceeds from the April sale of 7.5 percent convertible senior notes due 2011 to fund clinical work, research and development and the filing of new drug applications, the first of which is expected during the first half of 2007.
Though the company ran into trouble with its cancer drug, Xyotax (paclitaxel poliglumex), last year after Phase III results in patients with non-small-cell lung cancer failed to show a 30 percent improvement in survival, it managed to rebound with promising data in a subset of female patients with poor performance status (PS2). Cell Therapeutics recently reported that the FDA agreed to review an NDA submission of Xyotax, provided that it includes interim data from a confirmatory study in women only.
The PIONEER trial is expected to enroll 600 PS2 chemotherapy-na ve women with advanced NSCLC to be randomized to receive either Xyotax or paclitaxel every three weeks. The primary endpoint is overall survival.
Xyotax also is being evaluated in a Phase III trial in advanced ovarian cancer and in a Phase I study of esophageal and gastric cancer.
Behind Xyotax, the company is in late-stage development with pixantrone, which is designed to improve the activity of anthracyclines. The drug is in an ongoing Phase III study in aggressive non-Hodgkin's lymphoma.
Earlier this year, Cell Therapeutics reported preliminary results of a Phase I/II study of pixantrone combined with fludarabine, dexamethasone and rituximab (Rituxan, from South San Francisco-based Genentech Inc. and Cambridge, Mass.-based Biogen Idec Inc.). Those data demonstrated a 95 percent overall response rate, with 77 percent of patients experiencing complete disappearance of their tumors.
Pixantrone also is in development in refractory acute myelogenous leukemia.
A third drug candidate, CT-2106, is in Phase I/II testing in combination with 5-fluorouracil/folinic acid in metastatic colorectal cancer patients who have failed a regimen of oxaliplatin plus 5-FU/FA. The company is evaluating CT-2106, a camptothecin attached to a polyglutamate polymer, in other trials in advanced ovarian cancer and solid tumors.
The company's shares (NASDAQ:CTIC) closed at $1.44 Wednesday, up 5 cents.