At the same time, cancer drug company Cougar Biotechnology Inc. brought in $47.5 million through a private placement to support ongoing clinical work and completed a reverse merger to enter the public market.

In news released today, the Los Angeles-based company merged with public shell SRKP 4 Inc., creating a public entity in which Cougar stockholders hold 100 percent of the equity. The combined company will operate under Cougar's name and business plan.

Gaining access to public markets through reverse mergers has become a popular alternative for young private firms, said Alan Auerbach, Cougar's president and CEO, "with a number of companies taking this route rather than waiting and doing it via the traditional [initial public offering.]"

Several firms in recent memory have opted to go the way of reverse mergers, including Charlotte, N.C.-based Chelsea Therapeutics Inc., which merged with Ivory Capital Corp. in January 2005, shortly after completing its Series A financing round. Last May, Rexahn Pharmaceuticals Inc., of Rockville, Md., became a publicly traded company following a reverse merger with Corporate (See BioWorld Today, Jan. 24, 2005, and May 17, 2005.)

Prior to the merger with Cougar, SRKP 4 was a nonoperating shell created primarily to merge with a private company and did not have a stock market listing. A listing and trading symbol for Cougar "will be forthcoming," Auerbach said.

In conjunction with the merger, Cougar closed a private placement of about 27.5 million units to institutional and other investors, with each unit composing 0.9 shares of preferred stock and 0.1 shares of common stock. The gross proceeds of $47.5 million also included the conversion of about $7.8 million in previously issued debt.

Funds are expected to support the company's operations "into late 2007," Auerbach said, and will go toward the clinical development of Cougar's three oral cancer compounds.

The first, CB7630 (abiraterone acetate), is in Phase I testing in prostate cancer patients who have failed a first-line hormone therapy but have not yet started chemotherapy. CB7630 is a targeted inhibitor of the 17-alpha hydroxylase/c17, 20 lyase enzyme.

Also in Phase I is CB3304, an inhibitor of microtubule dynamics designed to treat hematological cancers, such as non-Hodgkin's lymphoma and multiple myeloma.

Cougar's third product, CB1089, is expected to enter the clinic later this year. A vitamin D analogue, CB1089 previously has been clinically tested against solid tumors, but the company is planning to develop the product as a potential treatment for prostate cancer.

Founded by Auerbach in 2003, Cougar plans to in-license clinical stage oncology compounds for development. The aim is to "hold onto them ourselves for as long as we can, so we can make the most of" potential future collaborations, Auerbach said.

The financing round was led by Boston-based Adage Capital Management LP, with participation from a number of other investors including: Brookside Capital, of Greenwich, Conn.; funds managed by T. Rowe Price Associates, of Baltimore; Merlin Biomed Group, of New York; RA Capital Management, of Boston; and Tavistock Life Sciences, of Windermere, Fla.

Cowen & Co. LLC, of New York, and Paramount BioCapital Inc., also of New York, acted as co-placement agents.