As it prepares to conduct a pivotal study for its hereditary angioedema drug, DX-88, Dyax Corp. raised $25.3 million in a private placement.

The Cambridge, Mass.-based company agreed to sell about 6.3 million shares of common stock to selected institutional and other accredited investors at $4 per share.

Henry Blair, the company's chairman, president and CEO, said the financing puts Dyax in a position to leverage its assets, taking compounds further through development, and then striking deals that are more backend-loaded.

"It's allowing us to maximize the value of our assets, without jeopardizing our ability to move our hereditary angioedema program forward," he told BioWorld Today.

The shares are being pulled from Dyax's shelf registration statement filed with the SEC in March 2003. That leaves about 1.7 million shares on the shelf. Dyax now has about 37.9 million shares outstanding, and the money should last the company at least through the end of 2006.

Deutsche Bank Securities Inc. and SG Cowen & Co. LLC, both of New York, acted as placement agents for the financing, which will fund general corporate purposes, including ongoing preclinical activities, clinical trials and operations.

Under a 50/50 joint venture with Genzyme Corp., Dyax's lead product, DX-88, has completed two Phase II trials to treat hereditary angioedema. While a third Phase II repeat-dosing trial is ongoing, the companies are planning a Phase III trial.

"We're looking forward to starting our pivotal Phase III trial this year, and we also have our phage display technology platform here that's generating new candidates all the time," said Sondra Henrichon, director of investor relations and corporate communications.

The company's technology rapidly selects compounds that bind with high affinity and specificity to therapeutic targets. Both DX-88 and Dyax's second clinical compound, DX-890, were identified using the phage display technology. Dyax hopes to file an investigational new drug application for a third preclinical program in an undisclosed therapeutic area by the end of the year.

While in the past, Dyax has partnered its candidates at the preclinical stage, it is taking a different approach with its lead preclinical drug.

"Obviously," Blair said, "it will be worth a lot more at the IND/Phase I stage than as a preclinical candidate."

DX-890, an inhibitor of human neutrophil elastase, is in an ongoing Phase IIb trial to treat cystic fibrosis. That product is partnered with Debiopharm SA, of Lausanne, Switzerland, which is covering all clinical development costs.

Dyax is responsible for half of the clinical costs for DX-88 under its agreement with Genzyme signed in June 2003. Cambridge, Mass.-based Genzyme will cover marketing and distribution expenses worldwide, and the companies will equally share profits for HAE and/or other chronic inflammatory conditions. (See BioWorld Today, June 25, 2003.)

The pivotal trial in HAE expected to begin later this year most likely will use a subcutaneous version of DX-88, instead of the intravenous form used in previous trials. It will be about the same size as a Phase II trial that enrolled 48 patients and met statistical significance with its efficacy and safety endpoints, but patients in the Phase III will be randomized to active treatment and placebo on a 1-to-1 ratio, instead of a 5-to-1 ratio.

The company expects to file a biologics license application next year. Dyax originally intended to file the BLA following the Phase II studies, but the FDA asked for additional clinical work, causing the company's stock to tumble 25 percent last October. DX-88 has orphan drug designation in both the U.S. and Europe, as well as fast-track designation in the U.S. (See BioWorld Today, Oct. 25, 2004.)

As many as 66,000 people in the U.S. and Europe are believed to have HAE, and between 3,000 and 5,000 people in each of those regions are "immediate access patients," Henrichon said. Symptoms are sudden swelling of the hands, feet, limbs, face, intestinal tract or airway.

"Hereditary angioedema is a rare disease," Henrichon said. "It's an acute inflammatory condition, very sporadic. The patient never knows when they'll have an attack. It is life threatening."

Dyax also is studying DX-88 for the prevention of blood loss during on-pump open heart surgery, or CABG procedures. That program, which has completed a Phase I/II trial, is not part of the agreement with Genzyme, and Dyax is actively seeking a partner - another reason for doing the $25 million financing at this time.

"Having this extra cash does put us in a greater position to negotiate," Henrichon said.

Dyax's shares (NASDAQ:DYAX) rose 2 cents on Friday, to close at $4.48.