BioWorld International Correspondent
LONDON - Ark Therapeutics plc raised £27.1 million (US$49.5 million) in a placing and open offer, reinforcing its cash position and providing the resources to get two gene therapy products to commercialization, along with a third product for treating cancer cachexia.
"This was a little more than we set out to raise, but we had a lot of support from existing and new investors," said Martyn Williams, chief financial officer. "We felt able to take a little bit more, and the share price performance illustrates there was still demand."
Shares in the London-based company rose by 5.5 pence to 87 pence after Ark announced the plan to place 31.9 million shares at 85 pence per share.
Ark raised £55 million when it led Europe out of the initial public offering doldrums in March 2004, becoming the first biotech to list on the main market in London in three years. It has £28 million of that cash still, and Williams said adding the new money will enhance the company's ability to negotiate good terms in partnering and licensing agreements.
About 50 percent will be devoted to progressing development of the three existing clinical programs through to the completion of Phase III. Another 20 percent will be invested in scaling up the production facilities for the two gene therapy products, Cerepro and Trinam, at the company's GMP-certified facility at Kuopio, Finland. The company also plans to spend 15 percent on progressing two earlier-stage clinical programs and on the further development of Scavidin, a drug delivery technology, and of a site-specific, targeted gene therapy technology platform.
The funding will enable Ark to develop a sales and marketing infrastructure for its lead product Cerepro for treating glioma. The product was accepted for "exceptional approval" on the basis of the Phase I safety trial and two Phase II trials by the European Medicines Agency (EMEA) in October. A Phase III trial involving 250 patients now is in progress.
Williams said Ark has received questions back from the regulators and is working through them. He told BioWorld International, "We always said to the investors our plan is to assume we don't get the earlier approval, and that we have to complete the Phase III, because we are being cautious.
"The time difference between early approval and using the Phase III data is about 18 months. On the other hand, with good Phase III data we might get faster uptake," he said.
Cerepro uses an adenovirus to deliver the gene for the enzyme thymidine kinase, which converts a prodrug into a form that is toxic to tumor cells but has no effect on normal tissue.
Ark's second gene therapy product, Trinam, is reaching the end of Phase II development. The product has orphan drug status in the U.S. and Europe and has FDA approval for a Phase II/III trial in hemodialysis access surgery. Trinam is a biodegradable collar device containing the gene for VEGF in combination with an adenoviral vector. In early results from the Phase II trial, grafts still were functioning at 14 months in four kidney dialysis patients in whom the mean time to failure of previous access grafts was 4.5 months.
Meanwhile, the company is working on the trial design for a confirmatory Phase III of Vitor, which it aims to start in the first half of 2007. In the earlier Phase III, Vitor slowed progression of weight loss in colorectal cancer and non-small-cell lung cancer. However, statistical significance was not reached in patients with pancreatic cancer, and while treated patients overall lost 29 percent less weight than untreated, the study did not meet its primary endpoint.
Williams concluded: "We now have a significant amount of money. When you look at the stage of development of the leading products, we can get them all beyond the point where we have confirmation that they work, including the cash to take Cerepro through under the longer route."