Incara Pharmaceuticals Corp. raised about $10.3 million after closing a private stock-and-warrant placement.

The drug development company sold about 41 million common shares, at the same time issuing five-year warrants to all buyers to purchase an aggregate of additional common shares equal to 40 percent of the 41 million shares at an exercise price of 40 cents apiece. Research Triangle Park, N.C.-based Incara said it would use proceeds to support further development of AEOL 10150, a catalytic antioxidant compound for amyotrophic lateral sclerosis.

The company said it is in the final preparation stages of filing an investigational new drug application for the product. Should eventual Phase I trial results prove satisfactory, Incara said it plans to begin a Phase II/III study as early as the first half of next year.

The company noted that animal studies of its catalytic antioxidants have shown that the products reduce damage to tissue in neurological disorders such as ALS and stroke, and in other non-neurological indications such as cancer radiation therapy, chronic bronchitis and asthma.

Investors included Biotechnology Value Fund LP, of San Francisco; Perceptive Life Sciences Ltd., of New York; and Great Point Partners LLC, of Greenwich, Conn., among others. New York-based SCO Securities LLC acted as the transaction's exclusive placement agent.

In connection with the financing, Goodnow Capital LLC, an investment entity controlled by the New York-based Xmark Funds, advanced the remaining $2.5 million of its $5 million convertible debenture and converted the entire debenture into common stock. Also as a result of the financing, the warrant to acquire 12.5 million shares previously issued to Goodnow expired unexercised pursuant to its terms.

On Monday, Incara's stock (OTC BB:ICRA) gained 6 cents, or 13.3 percent, to close at 51 cents.