IntraBiotics Pharmaceuticals Inc. entered into purchase agreements to sell 5.9 million shares of newly issued stock to institutional and private investors to raise net proceeds of $13.9 million.
The money will be directed toward IntraBiotics’ iseganan hydrochloride, an oral rinse now in two Phase III trials.
“It really shores up our finances and allows us to continue to develop our program for iseganan hydrochloride and for general corporate purposes,” said Eric Bjerkholt, senior vice president and chief financial officer for IntraBiotics, of Mountain View, Calif.
Bjerkholt would not disclose gross proceeds of the placement or the specific per-share price. The company has roughly 30 million shares outstanding, having issued 5.9 million for this financing, which is 20 percent of the shares outstanding prior to the offering.
“We’re burning from $6 million to $8 million a quarter, so this adds roughly two quarters [of funding],” Bjerkholt said.
IntraBiotics has iseganan hydrochloride in a pivotal Phase III trial to prevent and treat oral mucositis in chemotherapy patients. It is in the process of enrolling patients, and the company expects to unblind and release the findings of this trial in the fourth quarter.
A second Phase III trial is under way for individuals with head and neck cancer who are undergoing radiation treatment. That trial is fully enrolled with 545 patients, and the company expects to release the results in the second quarter.
In June, IntraBiotics cut its staff by 70 percent, or about 90 people, consolidated its facilities and terminated certain collaborations in an effort to cut $7 million to $8 million in expenses per quarter. It also decided to focus exclusively on the completion of iseganan trials. That followed news of the failure of iseganan, then called Protegrin IB-367 Rinse, in a Phase III trial for the prevention of oral mucositis in patients undergoing high-dose chemotherapy. The company attributed the result to a dosing error by a third-party vendor. The company now has 31 employees, with no immediate plans to add to the staff, Bjerkholt said. (See BioWorld Today, June 1, 2001.)
The company is no longer pursuing its ramoplanin program, which it had licensed from Biosearch Italia SpA., of Gerenzano, Italy. Biosearch ultimately took back the rights, and in October, Biosearch licensed the American rights to ramoplanin to Genome Therapeutics Corp., of Waltham, Mass. (See BioWorld Today, Oct. 10, 2001.)
IntraBiotics’ stock (NASDAQ:IBPI) gained 7.9 cents Wednesday to close at $2.76.