EntreMed Inc. is raising $14 million in gross proceeds after entering definitive agreements for a stock and warrant sale to a group of institutional investors.
The Rockville, Md.-based company, which is developing therapeutics for cancer and inflammation, plans to use its proceeds to support upcoming clinical trials of its lead oncology product candidate, Panzem, and to meet other corporate objectives. Its representatives could not be reached for comment.
In the placement, EntreMed sold about 5.5 million common shares at $2.55 apiece. The per-share price represented a 27.5 percent discount to the prior day's closing bid on the stock (NASDAQ:ENMD). On Monday, the shares dropped 22 cents to close at $3.03.
The transaction also included the issuance of a number of five-year warrants equivalent to 20 percent of the total number of shares issued, at a 15 percent premium to the market price of the stock.
Panzem (2-methoxyestradiol, or 2ME2) is in clinical trials for cancer, as well as in preclinical development for indications outside oncology. Capsules of the original form of the drug have advanced into Phase II testing for multiple myeloma and prostate cancer. Phase I trials have tested its use in advanced solid tumors and metastatic breast cancer.
More recently, the company developed a liquid suspension of Panzem called Panzem NCD. The company expects the liquid form, which it plans to push into clinical studies in the coming year, to increase the drug's bloodstream levels in cancer patents. EntreMed has a clinical supply agreement with Elan Corp. plc, of Dublin, Ireland, to produce reformulated Panzem.
The company's programs in angiogenesis, cell-cycle regulation and inflammation have led to the discovery of other molecules, such as analogues of 2ME2 and peptides of tissue factor pathway inhibitor (TFPI), as well as inhibitors of fibroblast growth factor-2 and proteinase activated receptor-2. Earlier this year, EntreMed partnered its TFPI program with Affymax Inc., of Palo Alto, Calif. (See BioWorld Today, Oct. 27, 2004.)
EntreMed had about 37 million shares outstanding through Sept. 30, at which time it had about $23.4 million in cash reserves. The company reported a $3.1 million net loss in the three months preceding that date.
EntreMed agreed to file a registration statement with the SEC within 30 days to permit the stock's resale by the investment group, which included Orbimed Advisors, of New York; Perceptive Life Sciences, of the Cayman Islands; Quogue Capital LLC, of New York; Domain Associates, of Princeton, N.J.; and other select institutional investors. Rodman & Renshaw LLC served as the transaction's placement agent, with Ferghana Partners also participating. Both are based in New York.