As it searches for a worldwide partner for its lead product, Immunomedics Inc. raised $15.1 million in a common stock sale to help advance its clinical candidates.
Selling about 4.2 million shares at $3.61 each to select institutional investors, the Morris Plains, N.J.-based company tapped into a $60 million shelf registration filed with the SEC in April.
"This will enable us to continue development of our lead product while we're in discussion with potential licensing partners on a worldwide basis," said Gerard Gorman, Immunomedics' vice president of finance and chief financial officer.
Specifically, the money will go toward the development of its lead product, LymphoCide (epratuzumab), in two indications, and for two earlier-stage products: a PAM4 antibody and a humanized CD-20 antibody. Immunomedics focuses on treatments for cancer and autoimmune diseases.
With a burn rate of about $18 million a year, proceeds would give the company a little more than 10 months of cash, Gorman said. As of March 31, Immunomedics had $25 million in cash and liquid securities, including $5.4 million in restricted securities to be used as collateral for the construction of expanded manufacturing facilities.
As part of the financing, investors gained rights to purchase an additional about 4.2 million shares of common stock at $3.97 per share by Nov. 24, which would result in another $16.6 million in gross proceeds. RBC Capital Markets is acting as the exclusive placement agent for the transaction.
Immunomedics' stock (NASDAQ:IMMU) dropped 59 cents Monday, or 14.9 percent, to close at $3.38.
Immunomedics has a strategy to take its products through Phase II trials before out-licensing them for Phase III development and commercialization. Epratuzumab is ready to enter late-stage trials in two indications.
"This product has been well tolerated in patients and is active against non-Hodgkin's lymphoma," Gorman told BioWorld Today, "and most recently we've seen early clinical signs that it might have some efficacy in patients with systemic lupus erythematosus."
Clinical data on epratuzumab has been recently presented at scientific conferences. In cancer patients, a pilot study of epratuzumab in combination with rituximab and CHOP chemotherapy showed an objective response rate of 87 percent, with 67 percent of patients having a complete response. In the lupus indication, Phase II results on 11 patients showed initial evidence of symptomatic improvement.
"The key points were that it was safe and well tolerated. We had symptomatic improvements in all patients. It was administered in less than an hour with no significant infusion reactions," Gorman said. "We achieved consistent antibody serum levels and decreased B-cell levels. And most important is that there was no evidence of immunogenicity, T-cell or immunoglobulin alterations."
Immunomedics' monoclonal antibodies and antibody fragments are designed to deliver radioisotopes and chemotherapeutic agents to tumors and other sites of disease. The pipeline includes nine candidates in clinical development.
Aside from epratuzumab, Immunomedics is studying CEA-Cide (labetuzumab) as a treatment for solid tumors. The company also plans to bring yttrium-90, a PAM4 antibody, into Phase I/II testing shortly, Gorman said.
"We've also begun Phase I/II clinical testing of our humanized CD-20 antibody in non-Hodgkin's lymphoma patients, and we plan to begin testing in certain autoimmune diseases in the near future," he said.
Immunomedics did have a partner for epratuzumab in North American and Australia, but Thousand Oaks, Calif.-based Amgen Inc. returned all rights to the product in April, allowing Immunomedics to move forward with finding a worldwide partner for the product. The companies originally formed their agreement in December 2000. (See BioWorld Today, Dec. 19, 2000.)