Neose Technologies Inc. is raising $17 million through a private placement of common stock.
The Horsham, Pa.-based company said late Thursday it entered into a definitive agreement to sell about 2.9 million common shares for $6 apiece. Neose, which a day earlier reported for the year ended Dec. 31 that it had $41 million in cash, cash equivalents and marketable securities, said it plans to use the funding to advance its products, as well as for general corporate purposes.
"While we had adequate resources to continue with our programs, in the near term we felt that the additional funds would allow us more flexibility in managing our business," Robert Kriebel, Neose's senior vice president and chief financial officer, told BioWorld Today. "This financing represents support for our technology and proprietary product strategy in a very difficult investment climate."
Neose, which reported about 14.3 million shares outstanding prior to the placement, works to improve protein therapeutics through the application of its GlycoAdvance and GlycoPEGylation technologies. Specifically, the company develops protein drugs that are designed as improved versions of currently marketed therapeutics - second-generation proteins designed for less-frequent dosing and improved safety and efficacy.
Many of its efforts to date have focused on collaborations to use its technologies to support other companies' development programs. While Neose said it does not plan to abandon its collaborative work, it also is shifting toward internal work. It plans to develop its first product through the GlycoPEGylation of erythropoietin.
"Our strategy is to develop a group of proprietary proteins," Kriebel said. "We will initially concentrate on opportunities in Europe."
The company said it plans to be in position to file an investigational new drug application in the second half of next year. But at the same time Neose continues its research and development partnerships.
In November, Neose entered an agreement with Monsanto Protein Technologies, a unit of St. Louis-based Monsanto Co., to investigate the use of its GlycoAdvance technology to enhance the glycosylation of therapeutic monoclonal antibodies produced in plants. A month earlier, Neose entered a pair of collaborations with Bagsvaerd, Denmark-based Novo Nordisk A/S to apply its GlycoPEGylation and GlycoAdvance technologies to improve unspecified Novo therapeutic proteins.
Its collaborative approach to its business took a hit last spring when Madison, N.J.-based Wyeth abandoned plans for a Phase III trial of a drug for myocardial infarction, P-selectin glycoprotein ligand - a program that called for manufacturing work from Neose. Though the decision was based on poor Phase II data and not on Neose's technology, its stock was penalized with a $9.26 hit - a 44.5 percent plummet. (See BioWorld Today, May 13, 2002.)
For the year, Neose had a net loss of $26.4 million, compared to a 2001 net loss of $13.3 million. Neose identified the discrepancy as, in part, due to a $6.1 million gain on its 2001 sale of shares in Cambridge, Mass.-based Genzyme Corp.
Neose is placing the newly issued shares with a group of institutional investors led by Domain Associates LLC. Concurrent with the transaction, Brian Dovey, a general partner at Princeton, N.J.-based Domain who serves on the boards of seven other companies, will be nominated for election to Neose's board at its annual meeting in May. Undisclosed new and existing investors participated in the private placement, in which JPMorgan acted as the exclusive placement agent.
Neose's stock (NASDAQ:NTEC) fell 24 cents Friday to close at $6.16.