BioWorld International Correspondent
Netting CHF21.4 million (US$18.2 million) in new funding, Cytos Biotechnology AG took just one week to place 460,000 new shares with institutional investors. The Schlieren, Switzerland-based company plans to use the cash to take its five lead development programs through Phase II trials.
The transaction, disclosed Friday, was underwritten by Swissfirst Bank AG, of Zurich, Switzerland. The shares were priced at CHF49.50 each, equivalent to the company's closing share price Thursday. Cytos now has CHF80 million in cash and cash equivalents, plus a real estate investment portfolio worth CHF17 million.
"We were financed into the second quarter of 2007. Now we are financed until the end of 2007," said Chief Financial Officer Jakob Schlapbach. "We have enough money for the clinical trials of these five programs."
Four already are in the clinic. The fifth, in obesity, will enter clinical development before the summer, Schlapbach said. All are based on Cytos' Immunodrug platform, a technology that is designed to elicit immunological responses to alleviate or prevent chronic conditions through the presentation to the immune system of disease-associated epitopes expressed in highly repetitive arrays on virus-like particles.
"The starting point of the transaction was the demand from institutional investors," Schlapbach said. "Investors have now seen the progress from a year ago, which was quite substantial." The company, which already has signed development deals with Novartis AG, of Basel, Switzerland, and the animal health arm of New York-based Pfizer Inc., wanted to strengthen its hand before entering any further partnering discussions, Schlapbach said.
Cytos, which was established in 1995, is due to reach a key milestone in its progress about two months from now, when it is scheduled to unveil data from its first proof-of-principle study, a Phase II trial of an Immunodrug in development for nicotine addiction.
"This will also be critical for the company's search to find a partner for that drug," said Denise Gugerli-Etter, analyst at Bank Sarasin & Cie AG in Zurich.
Coming up behind it is an allergy treatment, which is due to report Phase II trial results in the fourth quarter. In addition, therapies for hypertension and psoriasis currently are in Phase II and Phase I/II trials, respectively.