BioWorld International Correspondent
LONDON - GeneMedix plc raised £1.9 million (US$3.4 million) in an emergency placing of 13.6 million shares.
The new shares, representing about 5 percent of the issued shares capital, have been placed predominantly with GeneMedix investors in Asia.
Newmarket, UK-based GeneMedix said it faced a cash crunch at the end of February, with only enough money for the next three months. The placing price of 14.4 pence per share is a discount of 10 percent of the price on the London Stock Exchange on April 15. GeneMedix also is listed on the Singapore Stock Exchange.
Paul Edwards, CEO, said the placing would "ensure that we can continue to drive forward our erythropoietin [EPO] and insulin programs," but admitted it is a short-term fix and he is still looking for more money.
"We continue to review various opportunities to generate further funds and we are actively progressing a number of initiatives," he said.
Those include selling a GM-CSF manufacturing facility the company built in China. Edwards said selling the plant would raise cash and allow senior management to focus on the more lucrative European and U.S. markets.
Having detected an increased interest in biogenerics in the U.S., the company is putting in place an ADR (American depository receipt) program in a bid to tap U.S. investors.
In February GeneMedix was required to announce it was in discussions with a potential international pharmaceutical partner, and when he announced the placing last week Edwards said those negotiations are ongoing. The potential partner has an infrastructure in biogenerics and also would provide financing opportunities to help GeneMedix achieve its business plan.
Top of the list is the European launch of Epostim, a biogeneric version of EPO, projected for late 2006, after EPO comes off patent in Europe. The development program in the GeneMedix facility in Tullamore, Ireland, almost is complete, and the company says its product "can be shown to be similar in all essential respects to the innovator product."
The second priority is an insulin program, which will be transferred to a facility in Penang, Malaysia, that is just about to begin construction. GeneMedix expects the total investment in the plant of $34 million to come from Southeast Asian investors and national and regional government in Malaysia.
The cash shortage has forced GeneMedix to slow development of its other products, including IFN-beta and G-CSF.