Genaera Corp. bolstered its cash reserves after raising about $20 million in gross proceeds through a registered direct offering of discounted common shares and warrants.
The Plymouth Meeting, Pa.-based company sold 4.95 million shares at $4.04 apiece to four undisclosed institutional investors. The per-share price reflected a 10 percent discount to the five-day moving average of the stock's closing price on Jan. 20. On Thursday, Genaera's stock (NASDAQ:GENR) dropped 44 cents to close at $4.47.
"We're certainly delighted to have this capital to facilitate the further development of our programs, including our exciting program in wet [age-related macular degeneration]," Genaera President and CEO Roy Levitt told BioWorld Today. "And it provides further support for general corporate purposes and support for us as we pursue other programs in parallel."
The transaction also included 990,100 warrants, with each warrant equaling one share. The warrants have an exercise price of $5.38 per share. No banking firms were involved in the deal.
For Genaera, the transaction marks the second such stock deal in two months. In mid-November, the company raised $8.5 million through a sale of about 2.1 million shares, with New York-based Fortis Securities Inc. acting as placement agent. At the time, that deal virtually doubled the company's cash reserves, as it reported a total cash and investments balance of $8.2 million as of Sept. 30. Genaera had 37.5 million shares outstanding as of that date, and it recorded a $5 million net loss for the third quarter.
With cash reserves strengthened through both financings, Levitt said Genaera's chief focus going forward will center on pursuing its squalamine program for age-related macular degeneration. The anti-angiogenesis treatment has been evaluated in that indication overseas, and Genaera expects to complete an investigational new drug application this quarter to begin studying the product in the U.S.
"We're working with the FDA to iron out our development plans," Levitt said. "Those call for more long-term commitments, and we want to be able execute on those as agreed to with the FDA. It's also beneficial to have a stronger balance sheet in sitting face-to-face with partners."
He said the company expects to begin Phase II trials shortly after filing its IND, and plans to provide data from its ex-U.S. study near the end of this quarter or early next quarter. Squalamine also is in clinical trials for non-small-cell lung and prostate cancers, for which Levitt said the company would provide updates during the first half of this year.
Genaera's other products include Lomucin, a mucoregulator to treat the overproduction of mucus and secretions involved in certain forms of chronic respiratory disease. The clinical-stage compound is in trials for cystic fibrosis, and much of its Phase II program has been supported to date by the Cystic Fibrosis Foundation. Levitt said the company is soliciting further foundation support as it continues the Phase II program.
A preclinical product for asthma, interleukin-9 antibody, is partnered with Gaithersburg, Md.-based MedImmune Inc. in a deal that could be worth up to $55 million. Genaera expects to receive a cash milestone this quarter as the product moves into clinical trials.