Ecopia BioSciences Inc. is raising C$9 million (US$7.25 million) through a bought-deal private placement agreement to advance its lead compound for brain cancer into clinical trials.
The syndicate of underwriters, led by Desjardins Securities Inc. and including First Associates Investments Inc. and Orion Securities Inc., agreed to buy 10 million units at a price of C90 cents per unit. Each unit consists of one common share plus a third of one common share of a purchase warrant. Closing is expected on or about March 8.
The company also granted underwriters the option to purchase an additional 1 million units before 5 p.m. today.
Montreal-based Ecopia, which is developing compounds from a bacteria called actinomycetes for cancer, and bacterial and fungal indications, is preparing to file an investigational new drug application for ECO-4601, which has been shown to inhibit tumor growth in animal models of glioma.
"The idea is for us to file an IND before the end of the year, and start initiating a Phase I [trial] at the beginning of 2006," said Pierre Falardeau, president and CEO of Ecopia. He said the latest financing "will sustain us for about 22 months and make sure we have enough cash to get through Phase I."
Ecopia had about C$9.8 million in cash at the end of 2004. Falardeau said the company has not released its anticipated burn rate for 2005, but last year's burn totaled about C$7.3 million.
The company has sole ownership of ECO-4601 and all other compounds discovered using its Decipher technology, which applies a different approach to bacteria actinomycetes, a "friendly bacteria" that has been used to produce drugs such as streptomycin, erythromycin, amphotericin and doxorubicin, Falardeau said.
"What we use here is a genomics and bioinformatics platform to screen and discover compounds," he told BioWorld Today.
Ecopia's approach uses information from the bacteria's genomes to predict its chemical structure and activity, and then employs microbiology and chemistry processes to express and purify the compounds. The company's databank has compiled about 800 structures. Falardeau estimated that a new entity can be identified about every two to three months.
With the Decipher technology, Ecopia discovered five compounds in 2003, 14 more in 2004, and expects to discover between 10 and 15 compounds this year.
"All are being profiled and characterized in order to determine which ones will be developed further," he said.
Ecopia has three products, including ECO-4601, in preclinical studies. Falardeau said one more compound likely will move into preclinical work this year and, beginning in 2007, the company intends to start adding at least one compound to the clinic per year.
For its cancer compounds, Ecopia plans to seek partnering opportunities after advancing into Phase II trials. However, the antibacterial and antifungal products will be packaged in the preclinical phase and licensed out, he said, adding that two preclinical products - ECO-2301 for antifungal indications and ECO-0501 for antibacterial treatment - now are available for licensing. Revenue generated from licensing would go toward cancer development.
Founded in 1998 through a C$1.8 million private placement led by Theratechnologies Inc., also of Montreal, and other private investors, Ecopia has raised more than C$40 million to date, including an C$8.5 million private placement last February.
The company has 55 employees, divided into the discovery and preclinical divisions. Falardeau said a clinical group would be added this summer in preparation of the upcoming Phase I trial.
Ecopia is listed on the Toronto Stock Exchange (TSE:EIA). Its shares lost C8 cents Friday to close at C93 cents.