By Aaron Lorenzo
Corixa Corp. gained room to grow through an agreement with BNY Capital Markets Inc., a subsidiary of the Bank of New York, for a $75 million equity line of credit.
¿We have a lot of flexibility as to when we draw down and over what period we draw down,¿ said Michelle Burris, Corixa¿s chief financial officer and senior vice president. ¿So depending on how much cash we want to bring down, what is happening with our stock price, we have a lot of flexibility ourselves in the way this deal is structured.¿
BNY has agreed to purchase Corixa common stock at a 2 percent discount to the market price.
¿[That] is obviously quite good, from our perspective,¿ Burris added.
The financing will be available to Seattle-based Corixa, subject to certain conditions, at its option on an as-needed basis over a 24-month period. Subject to certain limitations not released at this time, Corixa has the right to determine the timing and amount of each sale.
¿That¿s really what we liked about it,¿ Burris said. ¿It was low risk to our shareholders, and provided a maximum amount of flexibility.¿
Shoreline Pacific LLC, of Saucalito, Calif., acted as a placement agent for the deal.
Corixa has approximately 41 million shares outstanding, Burris said, and had cash and equivalents of more than $137 million at the end of the third quarter.
¿We¿re not in a situation where we need cash right now, which is why we were able to get the terms we were able to get,¿ she added. ¿We don¿t want to be in a position where we have to slow down potentially high-value programs and have to go do a financing, or due to the market being lower. The financing is intended to be a safety net.¿
The money will further support the company¿s ongoing operations, build its technology base and advance development and marketing of products in the pipeline.
Bexxar, a monoclonal antibody conjugated to a radioisotope designed to combat non-Hodgkin¿s lymphoma, was recently submitted to the FDA for final approval.
¿We hope to be in front of ODAC in the first quarter of the new year,¿ Burris said. ¿What we¿re doing right now is preparing for an ODAC review, and obviously potential launch of that product in the calendar year of 2002. That¿s what we¿re planning, that¿s what we hope will occur. This financing is not necessarily required in order for that to succeed, but obviously we think it makes a lot of sense to have additional capital resources at our call that we can quickly get to, if needed.¿
Other advanced products in clinical development have experienced various degrees of success. Corixa¿s pipeline includes Melacine, a vaccine for melanoma; PVAC, to treat psoriasis; and an adjuvant portfolio.
Melacine¿s future is cloudy, though, after the FDA requested additional mortality and disease recurrence data.
¿It is unclear at this point in time what additional trials would be required, what those trials would look like,¿ Burris said. ¿We¿re in those discussions with the FDA. Whether or not we¿ll pursue those trials has yet to be determined.¿
Statistical significance showing that Melacine provides disease-free survival was lost (p>0.05). (See BioWorld Today, June 22, 2001.)
The company¿s PVAC product is continuing on its clinical path as scheduled. Preliminary U.S. Phase II results suggest that therapy at a dose of 15 micrograms per injection provides benefit to patients with moderate to severe psoriasis.
¿PVAC is entering into a Phase II trial probably early next year,¿ Burris said. ¿That is also obviously another program that we¿re pursuing that is partnered with a couple of different parties.¿
Including the aforementioned products, Corixa features 16 programs in clinical development and 22 programs at the preclinical stage.
¿We obviously have a large number of programs that are in the preclinical area as well as other programs that are in clinical trials,¿ Burris said. ¿Really, what we want to do is make sure we can ¿ based on a rational prioritization of our programs, those that have the greatest benefit to the investors ¿ pursue those over the next few years.¿
Also this year, the company received a $3.5 million, two-year contract from the Department of Defense for a Defense Advanced Research Projects Agency-sponsored program to develop methods of enhancing immune responses to infectious diseases.
Corixa¿s stock (NASDAQ:CRXA) finished up 24 cents Wednesday to close at $15.70.