Together raising close to $100 million, two biotech companies - one in the U.S., the other in Canada - plan to accelerate Phase III development of their lead drugs.
Vasogen Inc. raised about $50 million, while Aphton Corp. brought in $45.5 million. Their lead products are the cardiovascular drug Celacade and the cancer drug G17DT, respectively.
Vasogen To Advance Celacade
Vasogen Inc. priced its public offering at $5.90 and C$7.92 per share, selling 8.5 million shares - about a half million more shares than it had intended to sell - in the U.S. and Canada. Gross proceeds equaled about $50 million.
"We were obviously very happy by an excellent response," said David Elsley, CEO and president of Mississauga, Ontario-based Vasogen, adding that he was "thrilled by the investment community interest."
Needham & Co. Inc., of New York, and RBC Capital Markets, of Toronto, are serving as lead managers of the offering. A.G. Edwards & Sons Inc., of St. Louis, is acting as a co-manager. The underwriters have an overallotment option for about 1.3 million common shares.
"In terms of the use of proceeds, this financing provides the company with two-and-a-half years of cash, which will see us through the completion and reporting of two pivotal Phase III trials," Elsley told BioWorld Today, "one in chronic heart failure and one in peripheral arterial disease, with our lead product, Celacade."
Vasogen expects net proceeds from the offering to be around C$61.9 million, not including funds from the overallotment option.
In addition to funding clinical trials of Celacade, the company plans to cover regulatory expenses for the drug. The Phase III trials, which began last year, will be wrapping up within 12 to 15 months, Elsley said. He expects the company will report Phase III data from the peripheral arterial disease trial, which enrolled 500 patients, in the first quarter of 2005, right about the time the second Phase III trial will complete enrollment. The second trial, known as ACCLAIM, is enrolling 2,000 patients with chronic heart failure. The company expects to have its first data in the third quarter of 2005, Elsley said. Following the completion of the trials, Vasogen then would file for regulatory approval in the U.S., Canada and some European countries.
In early February, the company was granted CE Mark regulatory approval in Europe for Celacade to treat chronic heart failure. Vasogen plans to launch the product in Europe upon successful completion of the ACCLAIM Phase III trial.
Funds from the offering also will go toward drug development expenses for VP025, which is at the preclinical stage.
"We plan to have this drug in clinical development at the end of the year," Elsley said.
Vasogen focuses on immune modulation therapies to treat cardiovascular, neurological and other chronic inflammatory diseases. Celacade is designed to target chronic inflammation by activating the immune system response to cells undergoing apoptosis. It up-regulates the expression of cell-surface molecules that interact with specific receptors on antigen-presenting cells to modulate the production of cytokines.
The company also is developing a new class of phospholipid-based drugs to interact with APCs to regulate cytokine levels and control inflammation in the nervous system. VP025, the first candidate from the class, is optimized to target inflammation in the brain. Vasogen has collaborations studying VP025 at university centers in the U.S. and in Ireland, Elsley said, as a potential treatment for stroke, as well as Alzheimer's, Parkinson's and Lou Gherig's diseases.
As of Nov. 30, the end of the company's fiscal year, it had $46 million in cash. Following the offering, the company has 70.8 million shares outstanding.
Vasogen raised $37.5 million in July in a private placement of about 9.4 million shares. (See BioWorld Today, July 7, 2003.)
The company's stock (NASDAQ:VSGN) fell 5 cents Friday to close at $6.14. It fell C10 cents on the Toronto Stock Exchange (TSE:VAS), closing at C$8.20.
Aphton's $45.5M To Fund G17DT Development
Aphton Corp. priced its offering of 7 million shares at $6.50 per share, raising a total of $45.5 million. The underwriters have an overallotment option for about 1.1 million additional shares.
The company plans to use the proceeds to fund continued clinical development of G17DT, as well as to cover preclinical and clinical studies for other product candidates, including monoclonal antibodies. They also might use funds for potential licenses and acquisitions of complementary products or technologies, or for working capital and other general corporate purposes.
New York-based UBS Securities LLC is lead underwriter. Harris Nesbitt Gerard, also of New York, is acting as co-manager.
Aphton estimated in its prospectus that net proceeds would be about $41.8 million, not including the exercise of the overallotment option. The offering was made pursuant to a shelf registration, filed in December, to sell up to $100 million in shares of stock.
Company officials declined to comment due to an SEC-imposed quiet period.
Aphton develops products using its targeted immunotherapy technology for neutralizing hormones that participate in gastrointestinal system and reproductive system cancer and non-cancer diseases.
In 1997, the company formed a strategic alliance with Aventis Pasteur, the vaccines business of Aventis SA, of Strasbourg, France, for using G17DT to treat gastrointestinal system and other cancers in North America and Europe. Aphton completed a Phase III trial of G17DT and is conducting a second Phase III trial to treat pancreatic cancer. The company also completed testing of the drug in two Phase II trials to treat gastric cancer and colorectal cancer.
Aphton released positive results last October from its Phase III placebo-controlled trial with G17DT for pancreatic cancer. The trial enrolled 154 treatment-na ve patients. It was found to be safe and well tolerated, yielding a median survival of 151 days, compared with 83 days for patients treated with placebo. (See BioWorld Today, Oct. 31, 2003.)
The second Phase III trial is enrolling more than 400 patients, testing the compound with gemcitabine vs. gemcitabine alone. Data are expected in the middle of this year.
The company also has a global partnership begun in 1998 with GlaxoSmithKline plc, of London, for reproductive system cancer and non-cancer diseases. The alliance with GSK focuses on GnRH Pharmaccine, which is finishing Phase II testing in hormone-refractory prostate cancer patients.
As of Sept. 30, the company had $25.8 million in cash and current investments. With the offering, it has 36.5 million shares outstanding.
Aphton's stock (NASDAQ:APHT) closed Friday down 60 cents at $6.79.