To move its lead cancer product into Phase II trials, Tapestry Pharmaceuticals Inc. closed a $25.5 million private placement with nine institutional investors.
Since changing its name in 2004 from NaPro BioTherapeutics Inc. to reflect its focus on cancer and hereditary disease therapeutics, Tapestry has started two Phase I trials of TPI 287, a third-generation taxane.
The latest financing will boost that program into a number of Phase II trials planned for later this year in several major tumor types, and it will enable Boulder, Colo.-based Tapestry to develop an oral formulation of the drug.
"This gives us enough capital to ensure we can get substantially through our Phase II studies and begin to generate adequate data in our TPI 287 development program," said Gordon Link, the company's senior vice president and chief financial officer. "This is about two years of running room for us between our current cash [of about $10 million] and this financing."
The private placement involved the sale of 12.75 million shares at $2 apiece, as well as warrants for an additional 12.75 million shares with a strike price of $2.40 per share. The price reflects a discount to Tapestry's stock (NASDAQ:TPPH), which fell 4 cents Thursday to close at $3.64.
New York-based firms Special Situations Funds, Tang Capital Partners LP and Baker Brothers Investments led the financing, which included investments from Biotechnology Value Fund LP, Fort Mason Partners LP and Heights Capital Management, all of San Francisco; Merlin BioMed Long Term Appreciation LP, of New York; Versant Capital Management LLC, of Menlo Park, Calif.; and Xmark Funds, of New York.
"We are very pleased with the group of investors," Link told BioWorld Today. "They're well-known biotech investors, and it changes our investor base dramatically. Where it was almost all retail, now it's almost all institutional."
TPI 287 was designed to overcome multidrug resistance (MDR) in solid tumors. It is in two Phase I studies in the U.S. and overseas. The first trial began in May 2005 and was designed to enroll 48 patients. The second Phase I trial started in January. In vitro and in vivo studies suggested the compound might be orally bioavailable, and Tapestry is working at the preclinical stage to develop an oral version, which could be ready for an investigational new drug application filing next year.
"The hope is patients who are resistant to treatment with taxanes because of the overexpression of MDR by their tumors will be responsive to this drug," Link said.
TPI 287 has demonstrated the ability to inhibit tumor cell growth in a number of in vitro cell lines, including those known to be sensitive or resistant to taxanes, and it has shown inhibition of human tumors in animal xenograft models when tested against standard comparative agents, such as paclitaxel in breast cancer, docetaxel in prostate and non-small-cell lung cancers, and irinotecan in colon cancer.
TPI 287 has demonstrated reduction in the rate of tumor growth in both taxane-resistant and taxane-sensitive breast cancer xenografts. It also has activity in taxane-sensitive cell lines derived from uterine cancer and non-small-cell lung cancer, and in taxane-resistant cell lines derived from colon cancer, prostate cancer and pancreatic cancer.
"Taxanes currently have sales in excess of $2 billion," Link said, "so if we're able to treat the population of patients resistant to taxanes and to replace any of the taxane treatments, then obviously, it's a drug of great potential."
Founded in 1991 as NaPro, the company became Tapestry in 2004 shortly after divesting its paclitaxel franchise to Faulding Pharmaceutical Co., a subsidiary of Mayne Group Ltd. in Australia. (See BioWorld Today, Aug. 27, 2003.)
The company basically started over, Link said, with about $50 million left after paying off debt - money it used to develop TBI 287 to the point it is today. Tapestry is working on other projects in early development, but has not disclosed anything.
Last July, Tapestry reduced its work force by about 30 percent - eliminating 14 positions - and reduced its cash burn to focus resources on advancing TPI 287. The move was expected to save the company $7.4 million through the end of this year.
Originally announced in February, the financing was subject to a recent special meeting of shareholders, who approved the issuance of shares. Ferghana Securities Inc., of New York, provided financial and strategic advice to Tapestry, while Reedland Capital Partners, of Corte Madera, Calif., assisted the company in securing the financing.
In other financing news:
• Affiris, of Vienna, Austria, raised €8.5 million (US$10.4 million) in a Series A round with MIG Funds, of Munich, Germany, as the sole investor. The company began its operations in April 2004 to develop tailor-made vaccines against diseases with unmet medical needs. The lead product, AD-1, is a vaccine against Alzheimer's disease and is based on the Affitope platform technology. It is scheduled to enter a Phase I trial later this year. Earlier-stage projects are for vaccines against atherosclerosis and other indications.
• DOR BioPharma Inc., of Miami, agreed to sell about 13.2 million shares of stock and warrants to purchase about 13.2 million shares at an exercise price of 45 cents per share in a private placement to institutional investors for gross proceeds of about $3.65 million. Upon the exercise of all the warrants, DOR could receive an additional $5.9 million in proceeds. Funds will be used to support further clinical and preclinical development of the company's biodefense vaccine development programs for ricin and botulinum toxins, as well as continuing regulatory interaction with the FDA for orBec (oral beclomethasone dipropionate), including the upcoming new drug application filing.
• N-Gene Research Laboratories Inc., of New York, received a $3 million investment in a Series B/1 round from Corvinus Venture Capital Funds Management Ltd. Proceeds will be used for clinical development of lead product candidates, including BGP-15, a small-molecule insulin sensitizer that has completed Phase II trials in Hungary, and NG-SUN, a photoprotection and anti-aging compound in Phase I/II trials in Germany and France.
• Trinity Biotech plc, of Dublin, Ireland, obtained commitments from a group of institutional investors in the U.S. and Europe to purchase about 2.7 million American depository shares priced at $8.60 each in a registered direct offering. In addition, Trinity CEO Ronan O'Caoimh agreed to purchase about 223,460 ADS priced at $8.95 each for total proceeds of $2 million. Net proceeds are estimated to be about $24 million, with funds going to support general corporate purposes and business development, including acquisitions of companies, products and technologies to complement its business.