Having secured shareholder approval, V.I. Technologies Inc. is going ahead with a private placement of about 11.1 million shares of common stock, plus options to buy about 2.7 million more shares, and warrants for an additional about 5 million shares.
Vitex has agreements with investors and gross proceeds will total about $10.9 million, with the net haul to be used to advance ongoing clinical work with the Inactine Pathogen Reduction System for red blood cells, as well as for general purposes.
The first tranche of the placement was disclosed in January. In it, Vitex will sell about 7.3 million shares of common stock for 90 cents each, pulling down gross proceeds of $6.6 million. Investors get a five-month option to buy about 1.9 million more shares at that price, and four-year warrants to purchase about 2.9 million shares, exercisable for cash only, at $1.32 per share.
In the second tranche, Vitex will sell about 3.8 million shares at $1.15 each, for gross proceeds of $4.3 million. Investors will get a five-month option to buy about 944,563 more shares at the same price, plus four-year warrants for about 1.5 million shares, exercisable for cash only, at $1.75 per share.
Vitex's stock (NASDAQ:VITX) closed Tuesday at $1.60, down 5 cents.
The Inactine system, now in a Phase III trial, inactivates a range of viruses, bacteria and parasites, and can remove prion proteins while leaving intact the therapeutic properties of red blood cells. It works by attaching to the RNA or DNA of the pathogen, forming an irreversible bond to the pathogenic nucleic acid, thus preventing replication and effectively killing the pathogens.
Vitex estimates the market opportunity for its system at more than $4 billion, since more than 40 million red cell units are transfused annually in the U.S., Europe and Japan.
Phase III trials hit a snag in November when Vitex halted enrollment on the advice of a Data Safety Monitoring Committee, which examined data following Part A of the study before the company moved on to Part B. The panel's concern involved antibody responses in patients who were given Inactine-treated red blood cells, Vitex said at the time, but no serious adverse events were noted in the study. (See BioWorld Today, Nov. 13, 2003.)
"We're continuing to review and analyze the results," John Barr, president and CEO of Watertown, Mass.-based Vitex, said Tuesday. "We're trying to figure out how to resolve the issues."
The problems arose in testing chronic patients. A second Phase III trial in surgical, or acute, patients is ongoing, Barr noted.
"We're projecting enrollment will be complete by the end of the year," he told BioWorld Today. Data are expected soon after, probably early next year.
"It's a relatively straightforward trial," Barr said, calling the Inactine procedure "really a safety step for the manufacturing process for a therapeutic - that is a unit of red blood cells. What we're testing for is safety."
The predominant use of the system would be in acute patients, he added.