Onyx Pharmaceuticals Inc. raised gross proceeds of $10 million through the private sale of about 2.1 million common shares for $4.75 apiece.
The Richmond, Calif.-based firm said it would direct gross proceeds from the offering, placed primarily with New York-based Deerfield Management Co. Inc., toward working capital purposes. Specifically, Onyx is prioritizing its clinical development of BAY 43-9006, a small-molecule anticancer compound expected to enter Phase III testing later this year in co-development with Bayer Corp., a subsidiary of Leverkusen, Germany-based Bayer AG.
The company, which reported about 21.6 million shares outstanding at the end of last year's third quarter, said it had more than $50 million in cash, cash equivalents and short-term securities for the period ended Sept. 30.
The Raf kinase inhibitor is being developed in an almost 50-50 profit sharing arrangement except in Japan, with Bayer getting half the profits if it exercises a co-promotion option. Onyx, which also must pay 50 percent of the development funding, gained a $5 million loan in the third quarter of 2002 after beginning Phase II studies. It is due a $15 million loan when Phase III studies begin.
Onyx last month laid off a quarter of its then-95-employee work force, a move that went hand in hand with the company's decision to halt development of its ONYX-015 cancer drug. Without a partner, all Phase III trials in head and neck cancer were discontinued, and a planned Phase II study in colorectal cancer did not begin. (See BioWorld Today, Jan. 28, 2003.)
Late in the summer, Onyx regained full rights to ONYX-015, a modified adenovirus from Warner-Lambert Co., now part of New York-based Pfizer Inc. The company did not disclose how much it gained from the original deal, worth up to $155 million when first reported three years earlier. (See BioWorld Today, Sept. 18, 2002.)
Onyx, which is developing small-molecule therapies through technologies that target the molecular basis of cancer, features a preclinical portfolio that includes therapeutic viruses and Armed Therapeutic Virus products.
Onyx officials could not be reached for comment.
Onyx's stock (NASDAQ:ONXX) gained 17 cents Tuesday to close at $5.75.