Blood substitute developer Northfield Laboratories Inc. topped off the tank with $15 million in financing to fund a pivotal trial of its lead product, PolyHeme.

The Evanston, Ill.-based company received commitments for a registered direct offering of its common stock, agreeing to sell about 2.6 million shares at $5.80 apiece to a group of accredited investors. The proceeds supplement Northfield's cash reserves, which stood at $9.8 million on Nov. 30.

"For us, that is less than a year's funding, as our base burn has been about $1 million per month," Northfield Chairman and CEO Steven Gould told BioWorld Today. "Secondly, we have initiated this landmark Phase III ambulance trial [of PolyHeme]. It's an unusual trial in a lot of ways and a major event for us."

He said the pivotal study would cost about $15 million. The company began patient enrollment last month in the U.S.-based, 720-patient study, which is designed to evaluate PolyHeme's safety and efficacy in treating severely injured and bleeding patients when blood is not immediately available. Northfield is developing PolyHeme for the treatment of urgent, large-volume blood loss in trauma and resultant surgical settings.

The oxygen-carrying blood substitute requires no cross matching, making it compatible with all blood types, and it has a shelf life of more than a year. Treatment in the trial begins before arrival at the hospital, either at the scene of the injury or in the ambulance, and continues during a 12-hour post-injury period in the hospital.

"Our goal is to have 15 to 20 sites up and running," Gould said, adding that the company is looking to sites that can enroll a patient per week. "We're hopeful that we can get the trial done in about a year."

The financing, pulled from a $50 million universal shelf registration, follows a similar registered direct offering that raised $10.6 million in the summer. (See BioWorld Today, July 25, 2003.)

"With that shelf in place, we have the freedom to look for the appropriate timing and structure to raise money in the fashion that makes the most sense," Gould said. "For the new investors, it gives them new shares that are registered and freely tradable at the time."

The discounted per-share price in the latest placement reflects the result of negotiations between Northfield, its investors and the bankers, and the markdown is less than that in the July transaction. On Monday, the company's stock (NASDAQ:NFLD) dropped 3 cents to close at $6.85.

The buyers also received a 90-day option to purchase up to an additional $3.75 million of common stock at the same $5.80 price per share. Northfield, which reported about 16.2 million shares outstanding as of Nov. 30, expects the offering to close later this week, subject to satisfying customary conditions. New York-based SG Cowen Securities Corp. acted as the transaction's placement agent.

With financing concerns out of the way, Northfield will continue to focus its full efforts on its sole product.

"This is an unusual trial," Gould said, "because we're starting in the field in an ambulance, and operating under a waiver of informed consent under federal regulation. And frankly, there have been a number of individuals who were suspect that we could ever get this trial under way. So I think the fact that we made that announcement at the end of December was a major event, and was the impetus to get this [financing] done fairly quickly."