Vion Pharmaceuticals Inc. entered agreements under which it will raise $35.2 million in private funding expected to help finance the firm as its two lead drugs move into pivotal trials.
The company plans to sell about 13.6 million shares of common stock at $2.60 per share, and to issue investors warrants to purchase about 3.4 million shares at $3.25 per share for an additional $11 million.
Viron's stock (NASDAQ:VION) closed Tuesday at $2.90, up 19 cents.
Howard Johnson, president and chief financial officer of New Haven, Conn.-based Vion, told BioWorld Today the firm now has the money to push its lead agents, Triapine and Cloretazine. He believes the funding will support the firm into 2006.
"Our objective was to be in pivotal trials for one or both of our products in 2005," he said.
Factoring in the financing, Vion has about $50 million in cash and 52.8 million shares outstanding. Historically, Johnson said, the firm's burn rate has been between $3 million and $3.5 million per quarter. Vion employs 30 people. In a private placement in September, the company raised $11.3 million to help bankroll it through December. (See BioWorld Today, Sept. 11, 2003.)
The firm will release its year-end and fourth-quarter earnings in mid- to late March.
As for its products, the company this week said it stopped enrolling a Phase II study of Triapine as a single agent in prostate cancer patients in order to devote its resources to combination therapy trials. Ten people had been accrued. (See BioWorld Today, Feb. 9, 2003.)
Vion decided to shift its focus to studying Triapine as a combination therapy following release of weak results from a Phase II study of the candidate as a single agent in head and neck cancer patients. Licensed from Yale University, Triapine is an inhibitor of ribonucleotide reductase, an enzyme important for DNA synthesis.
Last May the company initiated two Phase II studies, which remain ongoing, of Triapine in combination with gemcitabine in patients with metastatic or advanced pancreatic cancer and in non-small-cell lung cancer patients. Also, Triapine is being studied in combination with Ara-C in advanced leukemia in a Phase I trial.
Behind Triapine, Vion is developing Cloretazine (also called VNP40101M), a sulfonyl hydrazine prodrug also licensed from Yale. Cloretazine has been studied as a single agent in Phase I trials in solid tumors and in advanced leukemia. The drug also is being studied in combination with Ara-C in advanced leukemia. Vion plans to begin Phase II trials in leukemia and solid tumors this year.
Johnson said the company is open to the idea of partnering its products.
In preclinical trials, Vion is looking at Tapet, a modified Salmonella vector used to deliver cancer agents directly to tumors, and KS119, a hypoxia-selective compound from the sulfonyl hydrazine class. The company has an option to license several heterocyclic hydrazones that have demonstrated potent antitumor activity in preclinical studies.
Rodman & Renshaw Inc., of New York, acted as the placement agent for the transaction. Vion will pay certain cash fees and will issue Rodman & Renshaw a warrant to purchase 300,000 shares of common stock at $3.24 per share, Vion said.