BioWorld International Correspondent
LONDON - Oxford BioMedica plc raised £22.1 million (US$35.3 million) in a fully underwritten rights issue, a move expected to enable the company to reach profitability in 2006 without a further fund-raising.
CEO Alan Kingsman told BioWorld International, "I would never say a financing is easy, but it was not difficult and drawn out." The company is issuing 130 million new shares at 17 pence per share in a 27-for-50 rights issue. The issue price of 17 pence is a 32.7 percent discount to the closing price of 25.25 pence Monday. The share price fell to 22.5 pence on Tuesday when the rights issue was announced.
When the financing is complete, Oxford BioMedica, of Oxford, will have £37.6 million in cash. During 2003 the company rationalized to cut costs and focus on its seven development-stage projects. As a result, spending was cut to £3.8 million in the first half of 2003, compared to £6.2 million in the same period last year.
Kingsman said that despite the uncertain market conditions, the company was in a good position in seeking the new funding. "We've never put out any bad news. We now have a strong story, I think. We are focused very hard on seven products and no longer doing any basic research."
The main reason for raising the money was to strengthen Oxford BioMedica's hand in partnering its lead products. "Our deal potential in the next 12 to 18 months is very high, and the extra money gives us flexibility," Kingsman said.
The company has always said it would partner before Phase III, and it now has enough money to take all its products to proof of principle. "Our cancer products are deal-ready, and although they are at an earlier stage, our neurotherapy products are attracting attention," he said.
There is interest in the ProSavin program for Parkinson's disease, and Kingsman said it may be possible to do a deal on the basis of efficacy in animal models and human safety data.
Oxford BioMedica's lead product, TroVax, a cancer immunotherapeutic, is in two Phase II trials in the UK in combination with standard therapy. The charity Cancer Research UK is to fund a third Phase II in colorectal cancer, and two further trials are planned to take place in the U.S. in renal cancer and breast cancer. The three trials are due to start before the end of 2003.
TroVax is expected to be ready to start Phase III trials in 2004, and the company is finalizing plans for commercial-scale manufacturing and starting talks with regulators on trial design.