Cancer drug company YM BioSciences Inc. is bringing in $40 million through a registered direct offering for drug development work and general corporate purposes.
The Mississauga, Canada-based company said it received subscriptions for about 9.5 million shares of its stock, priced at $4.25 per share. Subscribers included institutional investors led by Great Point Partners LLC, of Greenwich, Conn. The financing is expected to close Friday.
Shares of YM’s stock (AMEX:YMI) lost 61 cents, or 11.5 percent, Tuesday to close at $4.68.
The company was unable to comment due to quiet-period rules, but said in its prospectus that funds primarily will be used support its ongoing drug development activities. YM focuses on cancer products, with its lead drug, tesmilifene, in a Phase III study in metastatic and recurrent breast cancer, though the company added a Phase II-stage pain product to its pipeline through its acquisition of Delex Therapeutics Inc. last year.
In September, YM completed recruitment for its 700-patient Phase III study of tesmilifene, a small-molecule chemopotentiator that has demonstrated an ability to augment antitumor activity when used in conjunction with anthracyclines and taxanes. The ongoing trial is evaluating the use of tesmilifene plus anthracycline chemotherapy compared to anthracycline chemotherapy alone in breast cancer patients. Survival is the primary endpoint.
In a previous Phase III trial, the product was tested in combination with doxorubicin, demonstrating a greater than 50 percent increase in survival in women with metastatic and recurrent breast cancer, compared to those who were treated with doxorubicin alone. Tesmilifene has been designated a fast-track product.
A month ago, YM agreed to test tesmilifene in combination with Paris-based Sanofi-Aventis Group’s docetaxel in breast cancer patients. That trial initially will enroll up to 39 patients who will receive docetaxel every 21 days, plus a single infusion of tesmilifene at the start of each docetaxel cycle, for as long as 29 weeks.
Tesmilifene also has shown promising results in prostate cancer. Results of a Phase II study completed last year showed that patients with hormone-refractory prostate cancer who received YM’s drug in addition to treatment with mixantrone/prednisone had a 21 percent survival rate after two years.
Following tesmilifene in the clinic is a second cancer drug, nimotuzumab, a human monoclonal antibody targeting the epidermal growth factor receptor (EGFr) designed to be administered with chemotherapy or radiotherapy to treat epithelial cancers. That product is in Phase II, and has been tested in head and neck cancer and adult and pediatric glioma. An ongoing trial is evaluating nimotuzumab in non-small-cell lung cancer.
YM recently completed a Phase I/II safety and immunogenicity trial with its therapeutic vaccine, Norelin, which is designed to stimulate the production of antibodies against gonadotropin-releasing hormone to reduce the growth of sex hormone-dependent cancers. The first trial was conducted in hormone-sensitive prostate cancer patients.
The company also is continuing development of AeroLEF, an acute and breakthrough pain product gained through the May acquisition of privately held Delex, also of Mississauga. Delex, which now operates as a wholly owned subsidiary of YM, began enrolling patients last month in a Phase IIb trial to test AeroLEF, a free and liposome-encapsulated formulation of fentanyl that’s administered by pulmonary inhalation. That trial is expected to involve 120 patients in a postsurgical setting.
YM acquired Delex in a stock transaction, in which 1.6 million shares of YM stock were issued to Delex shareholders, with an additional 1.8 million held in escrow to be released in tranches on specific dates. Another 2.8 million shares will be issued upon the completion of certain development milestones, and YM agreed to pay Delex shareholders $4.75 million in cash or stock if AeroLEF gained U.S. approval.
YM reported a net loss of C$5.5 million (US$4.8 million) for the quarter ending Dec. 31. As of that date, the company had cash and short-term investments totaling C$20.3 million.
New York-based SG Cowen & Co. LLC served as the lead placement agent for the financing, with Dundee Securities Corp., of Toronto, and Canaccord Capital Corp., of Vancouver, British Columbia, acting as co-placement agents.
In other financing news:
• Acologix Inc., of Hayward, Calif., added $4.5 million through a second closing of its Series C financing. With its first closing in December, the company has raised a total of $30 million in Series C funds. Acologix plans to use the proceeds to fund Phase III development of AC-820, its drug candidate for the treatment of uremic pruritis in dialysis patients, as well as continue work on AC-100, its hard-tissue regeneration compound, and AC-200, a candidate aimed at reducing serum phosphate levels associated with chronic kidney disease. (See BioWorld Today, Dec. 22, 2005.)
• Amgen Inc., of Thousand Oaks, Calif., said it intends to offer about $2 billion principal amount of convertible senior notes due 2011, and about $2 billion principal amount of convertible senior notes due 2013 through offerings to qualified institutional buyers. With respect to any excess conversion value, the notes could be convertible into cash, shares of Amgen common stock or a combination of both, at Amgen’s option. The company also expects to grant purchasers an option to buy additional notes to cover overallotments. Proceeds are expected to be used to purchase $3 billion worth of shares of its common stock and to fund convertible note hedge transactions. Any remaining proceeds will be used for general corporate purposes.
• Copernicus Therapeutics Inc., of Cleveland, reached an agreement for Cystic Fibrosis Foundation Therapeutics Inc., of Bethesda, Md., to continue funding development of the company’s gene therapy for cystic fibrosis. The agreement provides $1.5 million for 2006, with the potential for $4.6 million in additional funding in 2007. If satisfactory progress continues in 2007, CFFT will support Copernicus’ CF gene therapy development and clinical programs through completion of a multiple-dose Phase II trial.
• Immtech International Inc., of Vernon Hills, Ill., closed its underwritten public offering of 2 million shares for gross proceeds of $16 million, with net proceeds totaling about $14.8 million. Funds will be used for ongoing research and development efforts, including activities related to its lead product, DB289, in a Phase III trial for trypanosomiasis. (See BioWorld Today, Feb. 9, 2006.)