Cytokinetics Inc. is raising $33 million through a stock sale to fund clinical development of its lead products, including a heart failure drug that recently started a Phase I trial.
Under a stock purchase agreement, the South San Francisco-based company arranged to sell 5 million shares of its common stock to Pittsburgh-based Federated Kaufmann and Baltimore-based Red Abbey Venture Partners at $6.60 per share. Net proceeds are expected to total about $31.9 million and will be used for "general corporate purposes, and funding for our R&D and clinical development programs," said Sharon Surrey-Barbari, senior vice president of finance and chief financial officer of Cytokinetics.
The company has an ongoing oncology collaboration in which GlaxoSmithKline plc is supporting the majority of work for the lead product, the Phase II-stage compound ispinesib, as well as two additional compounds selected for clinical development.
On its own, Cytokinetics has started work on a small molecule to treat heart failure, CK-1827452, which is expected to move into Phase II studies later this year.
The recent financing allows the company "to try to make sure that we have enough cash on hand to fully develop that product, at least in the coming 12- to 18-month time frame," Surrey-Barbari told BioWorld Today.
CK-1827452, designed to activate cardiac myosin, is in a Phase I study, administered in a six-hour infusion to patients with acute heart failure. A second version of CK-1827452 is in preclinical development as an oral dosing formulation to treat chronic heart failure.
With that work under way, the company anticipates that it likely will seek another financing in 2006, "as we look at where our development programs are for 2007," she said, though she added that the decision would depend on the state of the capital market and company milestones.
Cytokinetics could draw down funds from a $75 million committed equity financing facility entered last fall with private investment group Kingsbridge Capital Ltd. That deal allows the company access to funds over a three-year period, if needed. (See BioWorld Today, Nov. 1, 2005.)
The company has not yet released its fourth-quarter earnings. For the three months ending Sept. 30, Cytokinetics reported a net loss of $10.1 million, or 35 cents per share. As of that date, its cash position was $85.5 million.
Ispinesib is in eight ongoing Phase II trials, three of those conducted by the company's partner, London-based GSK in non-small-cell lung cancer, ovarian cancer and breast cancer. The five remaining studies are being conducted by the National Cancer Institute to evaluate ispinesib, a small-molecule inhibitor of kinesin spindle protein (KSP), in melanoma, head and neck, hepatocellular, colorectal and prostate cancers. NCI also is considering a Phase II trial in renal-cell carcinoma patients.
In addition, GSK is evaluating the drug in combination with docetaxel, carboplatin and capecitabine in three Phase Ib trials.
Cytokinetics and GSK agreed to collaborate in 2001 to discover, develop and commercialize drugs targeting human mitotic kinesins to treat cancer and other diseases. GSK is responsible for worldwide development and commercialization, with Cytokinetics entitled to royalty payments and co-promotion options for North America.
To date, the companies have selected three small-molecule candidates. Behind ispinesib is SB-743921, a candidate that also is aimed at inhibiting KSP. GSK has moved that product into Phase I in advanced cancer patients, though Cytokinetics decided to expand development activities to other indications. In September, Cytokinetics restructured the deal to take the lead in evaluating SB-743921 in non-Hodgkin's lymphoma, Hodgkin's lymphoma and multiple myeloma, in exchange for a chance at a higher royalty rate and co-promotion rights if the product is commercialized. (See BioWorld Today, Sept. 29, 2005.)
A third development candidate, GSK-923295, was identified last month, and is expected to enter the clinic against multiple tumor types in 2007.
Shares of Cytokinetics (NASDAQ:CYTK) closed at $7.07 Wednesday, up 18 cents.