Maxim Pharmaceuticals Inc. raised $25.5 million as it eyes the possible commercialization of its Phase III product, Ceplene.

The San Diego-based company grossed the funds after privately placing about 4.6 million shares at $5.60 apiece. The investors also gained five-and-a-half-year purchase warrants for another 1.4 million shares exercisable at $7.71 apiece, beginning six months after the deal closes.

On Tuesday, Maxim's shares (NASDAQ:MAXM) lost 43 cents to close at $6.36. San Francisco-based Merriman Curhan Ford & Co. acted as the transaction's sole placement agent.

The latest funding supplements the company's $81.8 million cash position as of June 30. At the same time, Maxim reported a $12.4 million quarterly net loss as well as 23.3 million shares outstanding.

The company said in a press release the funding strengthens the company's balance sheet as it prepares for the potential market launch of Ceplene (histamine dihydrochloride). Management could not be reached for comment Tuesday.

The company's near-term plans for the drug, which is designed to inhibit oxidative stress and reverse immune suppression, include a European approval application in November for advanced malignant melanoma, completion of a Phase III trial in acute myeloid leukemia and furthering its ongoing Phase III melanoma trial in the U.S.

Findings from an earlier Phase III melanoma study reported this summer showed that survival was achieved without adversely affecting quality of life. The data are from a multicenter, randomized trial called M01, a study on which Maxim initially filed for a new drug application that the FDA rejected. At that time, the drug was still called Maxamine. The ongoing melanoma trial, called M0104, is identical to M01 and should be enrolled by the end of the year. (See BioWorld Today, June 13, 2003, and Dec. 14, 2000.)

Maxim, which expects M0104 to support a second NDA, said it is discussing a license of Ceplene's oncology marketing rights in Europe as it prepares for potential launch in the U.S.

The company also is studying the compound in Phase II trials for hepatitis C and kidney cancer.

Beyond Ceplene, Maxim's pipeline includes small-molecule inhibitors and activators of apoptosis, which might serve as drug candidates for cancer, cardiovascular diseases and other degenerative diseases. Another product, MX8899 topical gel, is being developed for oral mucositis and radiation dermatitis, side effects of certain cancer therapies.