Laden with the expense of pivotal trials, Cell Therapeutics Inc. raised $42.8 million to give it the reserves to last through 2005.
The company sold 9 million shares at $4.75 apiece, taking the stock down from an existing shelf registration. Underwriters have an option for about another 1.4 million shares to cover overallotments.
Cell Therapeutics' stock (NASDAQ:CTIC) rose 33 cents Wednesday to close at $5.38.
About two weeks ago, the company proposed a public offering of 8 million shares, but Cell Therapeutics saw a chance to get more, and it took it.
"We were just thrilled to get out and tell the story," said James Bianco, CEO and president of Cell Therapeutics, of Seattle. "People hadn't heard the story in four years. Remember, we'd done [convertible debt offerings], so it's a different buying group."
The company marketed the offering for nine days, and had "nine or 10" meetings a day, sandwiched around conference calls.
"It was brutal," Bianco said.
The effort paid off, though, as the company's reception among investors was "probably much better than we had thought, given the way the market pulled back the whole week leading up to" the Democratic National Convention, Bianco told BioWorld Today.
Although there is "still a piece" remaining from the shelf registration, the company does not plan to raise further funds in the near future, he said.
"Our goal is to end  with a year in cash, as a minimum," Bianco said. "Our burn will be less in 2005 than it was in 2004. This will more than achieve that goal."
Cell Therapeutics had been planning to wait to raise funds until Phase III data surfaced from its STELLAR 3 trial of Xyotax as a front-line therapy for non-small-cell lung cancer, which was expected in August or September. But the trial, which completed enrollment of 400 patients in November, needed to reach 311 death events before analysis. The patients are living longer than historically predicted, pushing back data analysis.
"We decided to go out now because that trial has moved out to next year," Bianco said. "We just passed the 200-death point in late June, so we won't get to 311 events until late December, and the data won't be available until January."
The trial compares Xyotax, a polyglutamate polymer linked to paclitaxel, in combination with carboplatin to paclitaxel combined with carboplatin in high-risk non-small-cell lung cancer patients. The sought endpoint is a 30 percent improvement in median survival time. Bianco pointed out that the target patients have a performance status of 2 (PS2), meaning the cancer has a strong hold and patients' chances are bleak.
"This group typically does not tolerate chemotherapy well," he said. "The disease advances quickly, and they die quickly."
The STELLAR 4 trial focuses on the same PS2 population, but uses Xyotax as a single agent, comparing it to gemcitabine or vinorelbine. It has the same endpoint of a 30 percent improvement in median survival time and enrollment is complete, with 477 involved as of May. Data won't be examined until the first quarter.
The company has another large Xyotax study in lung cancer patients, although the drug is being tested there as a second-line treatment. That trial involves 840 patients, and data are expected in the second half of 2005.
There's more for Xyotax, though, as Cell Therapeutics and the Gynecologic Oncology Group (GOG) signed an agreement in which the group will sponsor and conduct a Phase III trial testing Xyotax in ovarian cancer. The investigational new drug application and special protocol assessment were submitted by the GOG earlier this month. The trial is expected to enroll 1,500 patients and will investigate Xyotax given once a month for 12 months, compared to no maintenance therapy, in women who have achieved complete remission following standard front-line chemotherapy. It will measure the drug's ability to prolong progression-free and overall survival.
Also in the pipeline is Pixantrone, an anthracenedione, being investigated in a Phase III trial in third-line aggressive non-Hodgkin's lymphoma. Enrollment of 320 patients should complete by mid-2005, and an interim analysis is planned for the second half of the year. The product has fast-track designation.
The company also is developing CT-2106, being tested in a Phase I/II trial in combination with 5-FU/leucovorin in colorectal cancer, and it has other products deeper in the pipeline. At the top, though, sits Trisenox (arsenic trioxide), the company's approved product for relapsed/refractory acute promyelocytic leukemia. In the first quarter, the drug brought the company net sales of $3.9 million. The company attributed the lower-than-expected sales to an error by the Centers for Medicare and Medicade Services that listed the reimbursement rate for the drug at $2.81 per milligram, instead of $32.94 per milligram. The error was corrected in February, but the pinch was felt.
The company reported its second-quarter earnings Tuesday, with sales of Trisenox rebounding, up to $7.9 million. Bianco expects growth to continue, and said that while the company hasn't given official guidance, he is "comfortable" with sales potentially reaching $50 million to $55 million next year.
Overall, the company posted a net loss of $37.5 million for the quarter, or 75 cents per share. It had $90 million in cash, cash equivalents, available-for-sale securities and interest receivable as of June 30.
With Xyotax pivotal trial data expected in early 2005, a filing planned for late in the second quarter and potential approval happening before 2006, next year should reveal much about Cell Therapeutics.
"It will be a data-packed, catalyst-packed year for us in 2005," Bianco said.