West Coast Editor

Selling the balance of shares from its shelf registration, Pharmos Corp. raised $16.75 million through the placement of about 5.6 million shares at $3 per share, with proceeds to be used for advancing its CB2-selective receptor agonist program while it forges ahead with a Phase III trial testing dexanabinol in traumatic brain injury (TBI).

The funds are "not allocated specifically," said Ray McKee, vice president of investor relations and corporate development for Iselin, N.J.-based Pharmos. "We weren't raising money for a specific, targeted, locked-in purpose," but the funds will be used for general corporate goals, he said.

Pharmos' stock (NASDAQ:PARS) closed Monday at $3.17, down 33 cents.

Pharmos has dexanabinol, a tricyclic dextrocannabinoid, in the works for severe TBI and as a preventive agent against post-surgical cognitive impairment. The compound, granted fast-track status by the FDA, blocks synthesis of pro-inflammatory cytokines in the injured brain.

Enrollment of 861 patients completed in mid-March, McKee said, with the last patient's follow-up due in September.

"We believe it will take us a couple of months to make sure all the paperwork is completed before we un-blind the data," he said. "We're targeting the end of December."

The drug also functions as an N-methyl-D-aspartate receptor antagonist that prevents the influx of calcium ions into the cells of the injured brain and functions as an antioxidant.

"We have an exploratory Phase II trial with the same compound, looking at its effect on preventing cognitive impairment in coronary artery bypass graft [CABG] patients," McKee told BioWorld Today. Dexanabinol is given at the time of surgery, aiming to prevent mini-ischemic events believed to cause the impairment.

Enrollment of 202 patients in the CABG trial was completed in July, and McKee said Pharmos expects to un-blind the results "just before the TBI data."

Other dextrocannabinoid drugs and CB2-selective receptor agonist compounds from the firm's synthetic cannabinoid library are being studied in preclinical programs targeting stroke, pain, multiple sclerosis and other disorders. The class "grew out of research into cannabis," McKee said, but - thanks to its selectivity in binding to CB2 receptors in the immune system - dexanabinol avoids the psychomimetic effects for which the substance is popularly known.

Two sites of cannabinoid receptors have been identified, he said: CB2 in immune cells (where dexanabinol works) and CB1 in the brain.

"We're looking at this [second] class of compounds as well," McKee said, although nothing has reached the clinic yet. That's expected "sometime in the first half of next year."

Meanwhile, big pharmaceutical firms are in the game. Among them is Sanofi-Synthelabo SA, of Paris, which has the CB1 receptor antagonist Acomplia (rimonabant) for obesity and smoking cessation awaiting FDA approval. Sanofi now is called Sanofi-Aventis, after completing its merger with Aventis SA last week.

"Some of the big pharma companies have interesting programs," McKee conceded, but said he was unaware of any firms close to Pharmos' progress with its CB2 research.

Acting as co-lead placement agents in the financing were Rodman & Renshaw Inc. and Harris Nesbitt, both of New York. The shelf registration was declared effective by the SEC in November and amended in December, when the firm priced a public offering of 10.5 million shares at $2.75 each, gaining net proceeds of about $27 million. (See BioWorld Today, Dec. 17, 2003.)

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