By Brady Huggett

Facing some rather large developments for its product Genasense in the coming months, Genta Inc. raised $28.6 million to ease financial stress.

The Berkeley Heights, N.J.-based company sold 2.2 million shares of common stock to Franklin Templeton and SF Capital Partners, both of San Francisco.

The shares sold for about $13 apiece, based on a 20-day weighted average. Genta¿s stock (NASDAQ:GNTA) rose 84 cents Wednesday to close at $16.24.

¿The cash is going to be used to further the lead Genasense product and give us the comfort to continue the partnership marketing discussions for Genasense without the pressure of the balance sheet,¿ said Tara Spiess, director of investor relations and corporate communications at Genta. ¿We are in very late-stage negotiations with partners and we intend to have the partnership completed before the release of Phase III data.¿

Genasense is an antisense drug that blocks the production of Bcl-2, a protein widely expressed in most common types of cancer. By reducing production of Bcl-2 in cancer cells, Genasense is designed to help current types of anticancer therapy kill cancer cells. Genta has the product in four Phase III trials: its core randomized studies in melanoma, myeloma and chronic lymphocytic leukemia and also a randomized study in non-small-cell lung cancer. Data should be forthcoming, Spiess said.

¿We are going to release Phase III data in the May to June time frame,¿ she told BioWorld Today. ¿And that will be in one of the three initial Phase III trials. All are on target to complete [at about the same time].¿

The fast-track designation given to Genasense means Genta, when ready, will be able to file its new drug application in sections. With several indications under evaluation, Genta is not yet sure which one will be stamped on the NDA. And it really doesn¿t matter, Spiess said.

¿The first [section filed] will be the nonclinical piece,¿ she said. ¿That will go in first and at that time you have to identify what indication you are going in. We don¿t care which one it is. It will be the trial that is the most positive and has the easiest route to approval.¿

Genasense also has been given orphan drug status.

Following the fund raising, Genta has just more than 81 million fully diluted shares outstanding and more than $52 million in cash on hand. It is burning through about $11 million per quarter, Spiess said, a figure that may increase toward the end of the year as Genta begins its marketing pitch for the anticipated Genasense approval. By that time, however, Genta hopes to have received another cash infusion through the signing of a partnership deal for Genasense.

Outside the United States, Spiess said Genta would be looking for a ¿straight cash and royalties¿ deal from a partner. However, Genta will accept ¿nothing less than a 50-50 partnership¿ if the agreement includes the more financially gainful U.S. market, she said. In which case, Genta would look for the partnership to have a five-to-seven-year duration.

Genta¿s overall research is compromised of four components: the antisense technology that gave rise to Genasense, small-molecule androgenics products, gallium products that inhibit bone resorption and oligonucleotide chemistry-based decoy aptamers. It has a liquid product, Ganite, approved for the treatment of cancer-related hypercalcemia that is resistant to hydration, to which it acquired rights last year. The company is planning a launch for that product, as well. But Genasense remains the largest star on the horizon.

¿The kinds of things that drive biotech stocks are partnerships and Phase III data and both of those things are going to happen to this company in the next eight months,¿ Spiess said. ¿It¿s an exciting time for the company and stockholders.¿

Advisers to Genta in the deal were UBS Warburg LLC, of Stamford, Conn.; Needham & Co. Inc., of New York; and U.S. Bancorp Piper Jaffray, of Minneapolis. Franklin stands as Genta¿s No. 2 stockholder, behind Paramount Capital, of New York.