Marching toward Phase III studies with its multiple myeloma treatment, NeoRx Corp. raised $15.75 million in private placement of 1,575 newly created class of Series B convertible preferred stock to institutional investors.
The stock is convertible into about 3.15 million shares of common stock at $5 per share, with no mandatory dividends payable.
NeoRx's shares (NASDAQ:NERX) closed Monday at $5.02, up 14 cents.
Buyers of the convertibles also got five-year warrants to purchase an aggregate of 630,000 shares of common stock at $6 per share, which could generate $3.78 million more for the company.
The placement left NeoRx with about $29 million in cash and investment securities, enough to fund operations into 2005, and the company said its first patients are expected to enroll into the Phase III trial during 2004's first quarter.
NeoRx officials could not be reached for comment.
STR delivers high doses of radiation to tumor sites in the skeleton with minimal damage to organs outside the bone, NeoRx said, targeting bone and adjacent marrow with a small-molecule agent known as DOTMP, combined with the radionuclide holmium-166.
NeoRx plans to conduct a randomized, controlled study of STR in patients with the primary refractory form of bone marrow cancer, enrolling about 240 evaluable subjects, half in the experimental arm and half as controls.
Patients in the experimental arm will get STR plus the chemotherapy drug melphalan, followed by autologous stem cell transplantation, and the control patients will get melphalan only, followed by transplantation.
In the spring, the FDA lifted its clinical hold on NeoRx's Skeletal Targeted Radiotherapy program, and in October the company said it had reached an agreement with the agency for a Phase III trial protocol. The company said then it was seeking a partner to help with Phase III costs and marketing. (See BioWorld Today, April 25, 2003, and Oct. 2, 2003.)
Serving as placement agent in the deal was Leerink Swann & Co. in Boston.