West Coast Editor

A private placement of about $50 million combined with resources on hand will give Inhibitex Inc. enough to finish its ongoing Phase III trial begun during the summer with Veronate, an antibody-based infection blocker for infants born at a very low weight.

"We came back to the market to complete the financing we hoped to do with our IPO," said Russell Plumb, chief financial officer of Alpharetta, Ga.-based Inhibitex.

The company's stock (NASDAQ:INHX) closed Friday at $7.44, up 37 cents.

Inhibitex went public in June, dropping its per-share price to $7 from an estimated $10 to $12 and selling 900,000 fewer shares than originally planned, for gross proceeds of "just under $39 million," he said. (See BioWorld Today, June 7, 2004.)

As of June 30, the firm's cash, cash equivalents and short-term investments totaled $47.9 million.

"We were getting close to about a year's cash at that point, and we had the Veronate Phase III trial that we expect to be completed the end of next year, with data the first half of 2006," Plumb said. "We did not have enough capital to complete the trial, and that was motivation behind this raise."

The purchase agreement, expected to be completed Nov. 10, is for the sale of about 6.8 million shares at $7.34 each to a group of institutional investors. Inhibitex also will issue warrants for about 2 million shares, with an exercise price of $8.81 each.

Proceeds will boost not only Veronate, a candidate based on MSCRAMM proteins on the surface of pathogenic organisms that allow infection to start and maintain itself, but also Aurexis. That humanized monoclonal antibody targets the same MSCRAMM protein as Veronate on Staphylococcus aureus, a leading hospital-associated bug.

The MSCRAMM acronym dates from the early 1990s and stands for Microbial Surface Components Recognizing Adhesive Matrix Molecules, found through research led by Magnus Hook at Texas A&M University's Institute of Biosciences and Technology.

Inhibitex is developing Aurexis as a first-line therapy in combination with antibiotics for bloodstream infections in hospitalized patients, with a Phase II study under way. Positive Phase I results were detailed recently at the Interscience Conference on Antimicrobial Agents and Chemotherapy in Washington.

Enrollment in the Phase II trial is expected to finish by the end of this year, with data in the first quarter of next and another trial to follow. "Whether that's a Phase IIb or Phase III is yet to be determined," Plumb said.

Both drugs are unpartnered so far.

"We intend to commercialize Veronate in the U.S. independently and look for a partner ex-U.S.," Plumb told BioWorld Today. "We've not done that yet, but that is part of our strategy."

Aurexis, he said, is "a little bit different. A perfect situation would be a global partnership with a co-promotion, co-marketing arrangement in the U.S."