With one Phase III trial under way for its wet age-related macular degeneration (AMD) drug, Evizon, and a second expected to begin before the end of the year, Genaera Corp. is raising $24.5 million in a direct equity placement.
The Plymouth Meeting, Pa.-based firm said institutional investors agreed to purchase about 11.4 million shares of common stock at a price of $2.15 each. Genaera additionally agreed to issue warrants for the purchase of 3.4 million shares at $3.15 per share.
RBC Capital Markets Corp., of Toronto, is acting as lead placement agent, and New York-based Fortis Securities LLC is acting as co-placement agent. The offering is expected to close today.
The company could not be reached for comment. Its shares (NASDAQ:GENR) closed at $2.25, down 37 cents.
Evizon (squalamine lactate) is an anti-angiogenic drug designed to block several growth factors, including vascular endothelial growth factor (VEGF), which has become a popular target against choroidal neovascularization associated with wet AMD. Late last year, New York-based Eyetech Inc. received FDA approval for its VEGF-inhibitor, Macugen, to treat AMD, and South San Francisco-based Genentech Inc. expects to file for regulatory approval in December for Lucentis, a drug targeting multiple VEGF pathways.
An intracellular agent, Evizon also inhibits integrin expression and reverses cytoskeletal formation, which causes endothelial cells to become inactive and induces apoptosis.
Evizon's route of delivery differs it from the competition. While Macugen and Lucentis both are given through intravitreal injections, Evizon can be given as an injection into a patient's arm. That means patients with wet AMD in both eyes can be treated through one shot of Evizon per dosing.
Genaera recently presented results of two Phase II studies of Evizon at the 23rd annual meeting of the American Society of Retina Specialists in Montreal. Those data showed that 100 percent of subjects in one trial demonstrated either stable or improved vision after four months, and of the patients who received 20 mg of the drug once weekly for four weeks, 17 percent showed three lines or greater of vision improvement.
The company and the FDA agreed on a special protocol assessment for a Phase III program, which will consist of two global registration studies enrolling patients with predominantly classic, minimally classic and occult forms of wet AMD. Primary endpoints will evaluate Evizon's safety and clinical benefit on visual acuity at one year, as measured by the Early Treatment Diabetic Retinopathy scoring scale. Secondary endpoints include changes in visual acuity from baseline in the study eye at two years and quality of life. (See BioWorld Today, June 28, 2005.)
Genaera also is testing squalamine in the treatment of solid tumors. The company's pipeline also includes two genomics-based programs. One is centered on the interleukin-9 antibody, a potential respiratory treatment based on the discovery of a genetic cause of asthma, and a second program is evaluating Lomucin, a microregulator to treat the overproduction of mucus associated with chronic respiratory diseases. Earlier this year, Genaera received a commitment for about $2.4 million from the Cystic Fibrosis Foundation Therapeutics for a pivotal Phase II trial in 200 cystic fibrosis patients.
The company recorded a net loss of $5.7 million, or 10 cents per share, for the second quarter. During that three-month period, research and development costs totaled about $4.9 million, due mostly to an increase in clinical trials and manufacturing for Evizon. As of June 30, Genaera had cash, cash equivalents and short-term investments equaling $20.8 million. Its last financing in November 2004 raised $14.4 million.
In other financing news:
Chiasma Inc., of Jerusalem, completed a $6.2 million Series B round to advance its lead candidates through clinical trials. The investment round was co-led by F-2 Ventures, of Surrey, UK, and the Ofer Hi-Tech Group, of Tel Aviv, Israel, and joined by the InnoMed Fund, which funded Chiasma's entire Series A Round, and Yissum Ltd., of Jerusalem. Proceeds will be used to move two lead molecules through Phase I and into Phase II. Both molecules were discovered using the company's Selective Cargo Delivery and InBitWin Delivery platforms to enable oral delivery of large molecules and other impermeable drugs into the bloodstream. Joining Chiasma's co-founders, Guy Yachin and Shmuel Ben-Sasson, on the board are Bard Geesaman, of F2 Ventures; Dalia Megiddo, of InnoMed; and Muriel Zohar, of Ofer Hi-Tech.
Geron Corp., of Menlo Park, Calif., plans to offer 6 million shares of its common stock under a shelf registration. Concurrent with the offering, Whitehouse Station, N.J.-based Merck & Co. Inc. agreed to exercise its warrant to purchase $18 million of Geron stock. UBS Investment Bank, of New York, is acting as the sole book-running manager, with other New York firms SG Cowen & Co. LLC, Needham & Co. LLC, and Lazard Capital Markets LLC acting as co-managers. Geron also granted underwriters an option to purchase an additional 900,000 shares to cover overallotments. Shares of Geron (NASDAQ:GERN) gained 2 cents Monday to close at $11.74.
RioTech Pharmaceuticals Ltd., of London, raised £750,000 (US$1.4 million) in a private financing round. The funds are expected to drive the preclinical development of the company's lead product, an interferon alpha-8 chronic hepatitis C therapy. Funds also will advance a program centered on the company's small-molecule target, an enzyme implicated in regulating the antiviral effect of interferons.
Teranode Corp., of Seattle, closed a $9.5 million Series B financing round, led by Cargill Ventures, of San Mateo, Calif., and Trident Capital, of Palo Alto, Calif. The company, which has raised a total of $12.1 million to date, plans to use the funds to expand sales and consulting channels in North America and Europe. Teranode also plans to expand its product with new infrastructure to support translational medicine. Its informatics platform, Teranode XDA, combines computational chemistry and biology with lab data. Ignition Partners and WRF Capital also invested.