West Coast Editor
With a new drug application under way for Genasense to treat chronic lymphocytic leukemia, Genta Inc. said it entered a deal to raise about $17.5 million through the sale of about 19.1 million shares at 92 cents per share.
The company's shares (NASDAQ:GNTA) fell 19 cents Monday, or 15.6 percent, to close at $1.03.
Proceeds from the sale, expected to close Thursday, will go mainly toward regulatory filings that are ongoing with two leading compounds, as well as for new trials, said Raymond Warrell, chairman and CEO of Berkeley Heights, N.J.-based Genta.
"We plan to use this as a bridge to the next financial milestone, which should be a partnership on the Genasense compound," he told BioWorld Today.
About a month ago, Genta began submitting its NDA for Genasense (oblimersen sodium) in combination with fludarabine plus cyclophosphamide for CLL patients previously given fludarabine, which the FDA has designated as a fast-track product.
At the same time, the company also filed a formal letter of intent with the European Medicines Agency as the first step in asking for clearance to market the compound combined with dacarbazine for chemotherapy-na ve metastatic melanoma patients.
Genta disclosed late last year its deal to sell 15 million shares of stock at $1.50 per share for gross proceeds of $22.5 million, following better-than-expected data with Genasense against CLL. Paris-based Sanofi-Aventis Group has already backed out of their potential $476.9 million deal. (See BioWorld Today, Dec. 7, 2004, and Dec. 16, 2004.)
The financial aspects of the Aventis deal were "extraordinarily attractive," said Warrell, pointing out that the arrangement was the second-largest single-product deal ever for a biotechnology compound. At the top of the heap is the $2 billion pact between New York-based ImClone Systems Inc.'s arrangement with Bristol Myers Squibb Co., also of New York, for the cancer drug Erbitux (cetuximab). (See BioWorld Today, Sept. 20, 2001.)
Genta's next main push will be finding a marketing partner for Genasense outside the U.S., Warrell said. An antisense drug, the compound is the firm's lead product candidate from its oligonucleotide program.
In Phase II for non-Hodgkin's lymphoma is the lead small molecule Ganite (gallium nitrate), which the firm already markets in the U.S. for cancer-related hypercalcemia that is resistant to hydration. The drug also is being studied for metastasis of cancer to the bone.
"We've done extensive use with IV Ganite," Warrell said, which is "extremely effective. It's been in multiple randomized trials and has consistently shown itself to be superior.
We'd like to develop a low-dose, oral form that patients can take for a very long period of time."
The IV version has completed study through Phase II, but the oral version is still in the formulation phase, he said.
In that indication, Ganite would go up against Basel, Switzerland-based Novartis AG's Aredia (pamidronate disodium), once marketed by Chiron Corp., of Emeryville, Calif., and another compound, Zometa (zoledronic acid), also from Novartis.
Both treatments in May gained headlines when the FDA insisted on revised labels to reflect the risk of osteonecrosis of the jaw for patients given the intravenous biphosphenates.
"We do have another antisense compound that we are looking to help move into the clinic," Warrell said. That drug targets the cancer gene c-myb. Research has been ongoing at the University of Pennsylvania, and the Phase I stage is just finishing, after which Genta will make a "go/no-go decision" on whether to move into Phase II, he said.
Late last year, Genta acquired worldwide rights from Philadelphia's Temple University to intellectual property and technology, as well as the antisense compound LR3001, which was developed there. The drug has orphan drug status for chronic myelocytic leukemia.
With proceeds from the most recent financing, Genta will have about $36 million in cash, and the company is forecasting a burn rate of $3 million to $4 million per month. Genta has no debt and sufficient supplies of Genasense to complete their trials and launch the compound worldwide.
Piper Jaffray & Co. in New York served as exclusive placement agent for the offering.