Genta Inc. secured added financial backing from Aventis SA, its partner for Genasense - the former's lead anticancer compound.
Berkeley Heights, N.J.-based Genta amended a year-old collaboration with Aventis to establish a $40 million line of credit related to development of Genasense, designed to inhibit production of the Bcl-2 protein believed to make cancer cells resistant to chemotherapy. Combinations of Genasense (oblimersen sodium) with chemotherapy are being evaluated in multiple Phase III trials in partnership with Frankfurt, Germany-based Aventis.
Genta said the added funding increases its 2003 cash position beyond $150 million - adding a significant measure of short- and long-term flexibility.
"Cash is always a great thing to have in this environment, and this brings forward $40 million in cash that otherwise would be paid upon approval of Genasense, which we project would be about a year from now," Genta Chairman and CEO Raymond Warrell told BioWorld Today.
The firm said it would use the funds to ensure adequate supplies of the drug for both accelerated development and commercial launch. Genta said it plans to release its initial Phase III results this summer.
Last spring, Genta and Aventis entered a worldwide development and commercialization agreement in which both parties share certain expenses. The deal was reported to be worth up to $480 million to Genta, which received $135 million in initial and near-term payments, including $75 million through an equity investment upon achievement of a clinical milestone, $40 million in development fees, $10 million as a licensing fee and $10 million in convertible debt. Another $280 million in cash and $65 million in convertible notes could be gained through additional clinical and regulatory milestones. (See BioWorld Today, April 30, 2002.)
The credit-line amendment provides immediate availability of the cash, considered an advance against both past and future costs. The short-term, revolving debt is secured by reimbursable development expenses from Aventis, as well as drug inventory. At the time of U.S. approval of the drug, any outstanding balance will be offset against the first milestone payment due to Genta.
"In effect, this is a revolving line of credit to make much more efficient use of our working capital," Warrell said. "That's an important financial advantage. And our agreement with Aventis effectively reduces our further financial investment in the Genasense product to quite a small amount. This further allows us to free up those dollars that we can then use for other purposes - particularly building out our pipeline of products."
Specifically, he said Genta would have more flexibility in applying funds toward Ganite, a drug he said should be launched in the second half of this year to treat cancer-related hypercalcemia. An added indication includes its use as a treatment for non-Hodgkin's lymphoma, an application still being studied.
"This will be our first product out, and we're building up our sales force and manufacturing supplies to enable that launch," Warrell said, adding that the drug will be marketed and sold exclusively by Genta.
The company also plans to spend a bit more freely in continued development of other small-molecule portfolio products, including gallium-containing compounds and androgenics compounds for prostate cancer, as well as an anticancer series of DNA-based compounds called decoy aptamers.
Future pipeline expansion plans also could include acquisitions, given the added financial flexibility Genta has secured.
Its shares (NASDAQ:GNTA) rose 24 cents Monday to close at $6.45.