ConjuChem Inc. raised C$21.7 million (US$17.6 million) to fund clinical trials for two lead compounds developed using its long-acting delivery platform.

The Montreal-based company issued 4.6 million shares on a bought-deal basis at C$4.70 per share. The financing was underwritten and co-led by a syndicate consisting of Orion Securities Inc. and GMP Securities Ltd., both of Toronto. Underwriters have the option of acquiring an additional 694,000 shares to cover overallotments, which would increase gross proceeds to C$25 million.

Net proceeds "will primarily go toward our ongoing clinical development programs," said Jacques Lapointe, ConjuChem president and CEO. He said the company's compound for Type II diabetes, DAC:GLP-1, is in Phase II trials, and its DAC:GRF compound, a growth hormone factor, will be entering Phase II later this year.

Lapointe said he expects the financing to take the company "well into 2006," and anticipates a burn rate of about C$3 million per month in 2005.

As of Oct. 31, ConjuChem had C$26.8 million in cash, cash equivalents and short-term investments. The company posted a net loss of C$47.7 million for the year, which was partially attributed to an increase in research and development expenses, namely a cost of C$14.6 million that was related to DAC:GLP-1 and DAC:GRF clinical development.

Shares of ConjuChem (TSE:CJC) closed at C$4.61 Monday, down C6 cents.

The DAC (drug affinity construct) technology is designed to extend the half-life of a peptide from minutes to days, allowing for less-frequent dosing. Lapointe said the extended activity results from bonding the peptide to the protein in serum albumin, a process also called in vivo bioconjugation.

DAC:GLP-1 is based on the naturally occurring peptide, GLP-1, which helps normalize blood glucose levels. Similar products are in development by other biotech firms, such as twice-daily exenatide - Amylin Pharmaceuticals Inc. submitted a new drug application last year - but Lapointe said ConjuChem's formulation is a "longer-acting version than [what Amylin] is developing," adding that DAC:GLP-1 would have to be administered "once a day, or better, up to once a week."

Last month, ConjuChem said that Phase II data of DAC:GLP-1, in combination with Metformin, demonstrated a significant reduction in blood glucose levels in patients on oral diabetic medications. That product is set to begin further Phase II trials this year, and likely will enter Phase III trials in 2006, Lapointe said.

Growth hormone factor, DAC:GRF, also works on a longer-acting dosing frequency, "somewhere between once a week and once every two weeks," he told BioWorld Today, adding that the less-frequent dosing "makes a huge difference to patients."

DAC:GRF is designed to treat growth hormone deficiencies in critically ill adults, such as burn victims or sepsis patients, as well as cachexia/lipodystrophy, particularly in AIDS patients. The product also would be used to treat short stature.

ConjuChem has DAC-based insulin in preclinical development, and Lapointe said two other compounds, including an HIV product and an obesity product, are set to move into preclinical development this year.

In other financing news:

• BioMS Medical Corp., of Edmonton, Alberta, announced an agreement with Fraser Mackenzie Ltd. to lead a banking syndicate for a short-form prospectus offering up to 10 million units at a price of C$3.60 per unit. An overallotment option of 1.5 million units at the issue price will be offered. Each unit will consist of one common share and a four-year purchase warrant for an additional common share at a price of C$5 per share. BioMS said the offering will close around March 31. Gross proceeds of C$36 million (US$29.1 million) will be used to fund the pivotal Phase II/III trial of MBP8298 in multiple sclerosis. Patients are being enrolled at sites in Canada, with Europe to follow. BioMS also is set to initiate a Phase I trial for HYC750, a therapeutic designed to mobilize stem cells and neutrophils to treat cancer therapy-related side effects. Shares of BioMS (TSE:MS) dropped C53 cents on Monday, or 12.8 percent, to close at C$3.62.

• MultiCell Technologies Inc., of San Diego, completed a $4 million private placement with institutional and other investors, issuing 26.7 million shares of common stock at 15 cents per share. The company also offered three-year warrants to purchase 18 million shares at 20 cents per share, and three-year warrants to purchase an additional 8 million shares for 30 cents each. MultiCell said proceeds will fund further development of its stem cell technology and for general corporate purposes. The company obtains stem cells from adult liver tissue to pursue discovery opportunities, and said the use of liver stem cells might have a number of therapeutic applications, including treatments for hepatitis C.

• Voyager Pharmaceutical Corp., of Raleigh, N.C., received commitments for a $16 million private financing round. Proceeds will be used to fund ongoing clinical trials of its candidate for Alzheimer's disease, and to develop its pipeline at the company's recently opened laboratory in Research Triangle Park, N.C. Voyager's Invention Center is conducting preclinical work in prostate cancer, ALS, brain cancer, Parkinson's disease and improving post-natal development of premature infants. The company expects to move many of those products into the clinic by the end of the year. Voyager, which focuses on developing products in diseases of aging and development, has raised a total of $40 million to date through private investors.

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