By Brady Huggett
Riding higher now, EntreMed Inc. closed a $22.6 million private placement that it will use to drive late-stage trials for three products.
Rockville, Md.-based EntreMed issued about 2.9 million shares, and warrants to purchase up to about 730,000 shares of common stock at an exercise price of $11.81. The warrants are exercisable until Dec. 18, 2006. Also, if the stock trades above a certain level, EntreMed may call the warrants after giving notice to investors. Full exercise of the warrants would result in further funds of about $8.6 million.
The private placement was made through institutional investors and existing stockholders.
¿We¿re in Phase II trials now with two of our three candidates and the other will be in Phase II in the middle [of 2002],¿ said John Holaday, CEO and chairman of EntreMed, adding that EntreMed has ¿an aggressive clinical trial program¿ that requires ¿making a lot of protein.¿
The company had a cash position of about $38.1 million at the end of the third quarter and has about 21.2 million shares outstanding following the financing. Steven Goldfarb, EntreMed¿s vice president, finance, said the private placement was more about seizing the moment than acting out of need.
¿In this marketplace, you look for windows of opportunity,¿ he told BioWorld Today. ¿We weren¿t in a position where we needed this cash, but with a window that was open, we took advantage of that. We will always try to keep a year of cash in the bank.¿
Through the first nine months of 2001, EntreMed posted a net loss of about $19.3 million, compared to the first nine months of 2000, when it posted a net loss of approximately $35 million.
EntreMed¿s product front line consists of Endostatin, Panzem and Angiostatin. Endostatin and Panzem are in Phase II trials ¿ Endostatin for neuroendocrine tumors, Panzem for multiple myeloma. Both products have been given orphan drug status. Angiostatin is in Phase I trials now. All three products are recombinant proteins of naturally occurring compounds designed to halt or inhibit angiogenesis. If things continue as planned and Angiostatin joins its colleagues in Phase II trials next year, they will supply EntreMed with what Holaday described as ¿three strong shots on goal.¿
The financing gives EntreMed what it needs ¿ for now ¿ to fund the trio¿s development. But with the potential of three Phase III programs in the future, Holaday said partnerships and public offerings ¿will give us the funds to take this all the way to market.¿
The company is growing up, Holaday said, and building momentum. The CEO spoke of a ¿coming of age¿ at EntreMed and said that the financing will give the company ¿extra fuel in its tank¿ as it negotiates deals.
¿You are sitting higher in the chair if your wallet if fatter,¿ he said.
EntreMed¿s stock (NASDAQ:ENMD) fell 33 cents Wednesday to close at $8.07.