West Coast Editor
With one compound against the hepatitis C virus in Phase I trials and another HCV therapy set to enter the clinic in the second half of this year, XTL Biopharmaceuticals Ltd. entered definitive agreements with institutional investors to raise $28 million in a private placement, issuing ordinary shares consisting of American depository receipts and warrants.
The sale gives New York-based XTL enough cash to get into 2008, said Ron Bentsur, CEO of Rehovot, Israel-based XTL.
"We now have sufficient funding to reach the milestones we envisioned," he said. "One is to reach clinical proof of principle with our two compounds, and we also have a little bit of flexibility and negotiating power vis-a-vis potential in-licensing and acquisitions candidates."
In the deal, XTL sold about 4.7 million ADRs, representing about 46.7 million ordinary shares, at $6 each. XTL will issue a five-year warrant to buy one-half an ordinary share for each ordinary share bought, with an exercise price equal to about 87 cents per share (which is equivalent to $8.75 per ADR), for a total of about 23.3 million warrant shares.
The company has XTL-6865, a combination of two monoclonal antibodies against HCV, in Phase I trials against chronic disease. Due to start Phase I in the second half of the year is XTL-2125, a small molecule, non-nucleoside inhibitor of HCV.
"I think both of them can be in Phase II in the first half of 2007," Bentsur told BioWorld Today, and "we’ll have the all-important, Phase I, single-agent viral load reduction data within 12 months [for both]."
Such is the kind of data that proved so beneficial for the likes of San Diego-based Anadys Pharmaceuticals Inc., which last summer entered a potential $570 million agreement with Basel, Switzerland-based Novartis Pharma AG to advance ANA975 and other Toll-like receptor 7 oral prodrugs for chronic HCV and HBV. (See BioWorld Today, June 3, 2005.)
Idenix Pharmaceuticals Inc., of Cambridge, Mass., had its lead HCV drug in Phase I/II trials when the firm went public in 2004 and raised $140 million, of which $75.6 million came from a private placement by Novartis. (See BioWorld Today, June 23, 2004.)
A preclinical-stage HCV deal made news Monday, when PTC Therapeutics Inc., of South Plainfield, N.J., and Kenilworth, N.J.-based Schering-Plough Corp. entered a collaboration and licensing arrangement that includes other viral diseases and is worth $12 million up front, with total payments that could exceed $200 million.
"Let’s put it this way - a lot more options will open for us" with the Phase I data, Bentsur said, adding that XTL is "not looking to partner" either compound now.
In June, XTL out-licensed to Cubist Pharmaceuticals Inc. an antibody against hepatitis B, HepeX-B, which finished a Phase IIb study in HBV liver transplant patients. Lexington, Mass.-based Cubist said HepeX-B prevented viral re-infection in the study, which treated patients with monthly infusions of 20 mg or 40 mg HepeX-B vs. 5,000 IU of hepatitis B immune globulin, and the data also showed fewer and less serious adverse experiences reported in both HepeX-B groups compared to the HBIg group. Cubist said in December it planned to review the results with the FDA early this year.
XTL’s goal is to acquire or in-license at least one clinical stage compound per year, said Bentsur, who until this year served as vice president of finance and investor relations at Keryx Biopharmaceuticals Inc., of New York.
"It’s a philosophy that worked very nicely for us at Keryx," he said.