BioWorld International Correspondent

Swedish firm Active Biotech AB is looking to put something away for a rainy day.

The Lund-based company aims to add SEK224.9 million (US$26.5 million) to its coffers through a rights issue planned April 23 through May 15. Existing shareholders will have preferential rights to participate in the fund-raising, which is priced at a considerable discount to Active Biotech's current share price.

The company is planning to issue up to 22.5 million new Class B shares at SEK10 per share. Prior to announcing the rights issue Thursday, its shares were trading at about twice that figure, but had dropped to SEK17 by last week's close.

Although the move requires investor approval at the company's annual meeting April 10, its biggest shareholders have already swung their weight behind the initiative. "It's 75 percent guaranteed, which is a pretty strong signal," Active Biotech President and CEO Sven Andréasson told BioWorld International.

Pharmacia Corp., of Peapack, N.J., the company's single biggest shareholder, is not participating in the transaction, but has assigned its rights to MGA Holding, the private investment vehicle of Scandinavian shipping magnate Mats Arnhog, which has pledged to invest up to SEK169 million. Between them, the two entities hold 32.4 percent of Active Biotech's equity and control 49.9 percent of its voting rights. Other large shareholders also have indicated their support in advance.

"It's a friendly offer for the shareholders, we believe," Andréasson said. The additional cash will, he said, strengthen the company's hand in partnership negotiations, give it additional staying power and enable it to continue its clinical development programs. "We're not in need of this right now, but we don't want to ask for money when we desperately need it," he said.

At the end of 2002, Active Biotech reported holdings of SEK329.1 million in cash and investments. It is burning SEK75 million a quarter. "We consider ourselves to be at the peak of spending," Andréasson said. The company has five drug candidates either in or about to enter the clinic, none of which is yet partnered. Three of its programs - representing four of these therapies - are in play, and discussions with a range of partners are under way.

Its lead program, an orally administered multiple sclerosis therapeutic, SAIK-MS, is undergoing a Phase II trial involving 200 patients in the Netherlands, England, Russia and Sweden. It has just passed the halfway point, and the company expects to report its findings before the year's end. "We would like to partner before [the results become available] because it is important to have a seamless transition into Phase III . . . since this is a race to be the first to market with an oral compound," Andréasson said.

Its competitors here include Jerusalem-based Teva Pharmaceutical Industries Ltd. and Copenhagen, Denmark-based partner H. Lundbeck A/S, which are developing an oral form of Copaxone for relapsing remitting multiple sclerosis. That is stalled at the Phase III stage, following an unfavorable interim data analysis. Serono SA, of Geneva, Switzerland, and IVAX Corp., of Miami, said in October they would work on an oral version of the latter firm's Cladribine.

Active Biotech has two therapies in development based on its Tumor-Targeted Superantigen (TTS) platform, which stimulates a T-cell response to tumor cells by rendering them highly immunogenic through the use of tumor-specific antibody fragments fused with Staphylococci-derived superantigen molecules.

CD2, which represents the second generation of the technology, is in Phase IIa trials in the UK in patients with renal and pancreatic cancer. That version requires individual doses for each patient, Andréasson said, whereas its successor, CD3, can be delivered in a standard dose. The latter is due to enter a Phase I trial in patients with non-small-cell lung cancer at the Fox Chase Cancer Center in Philadelphia in the second quarter.

The company's TASQ (Tumor Angiogenesis Suppression by Quinolines) program, which is in development for prostate cancer, has completed a Phase I trial in healthy volunteers. A dose-escalation study is slated for the spring, and dosing of patients will follow next year.

A fifth molecule, ABR-215757, is in development for lupus, and is slated to enter the clinic later this year. Like SAIK-MS, it is derived from the company's linomide chemistry, or "Q," platform.