By Karen Young

MGI Pharma Inc. closed a private placement of more than 3 million shares of common stock to institutional investors, raising $31 million.

This gives the company nearly $70 million in liquid capital, with about 24 million shares outstanding, said Chief Financial Officer Bill Brown. The common stock sold at a price of $11 per share was a ¿modest discount¿ to market price, Brown said.

Minneapolis-based MGI¿s shares (NASDAQ:MOGN) closed Thursday at $12.75, up 14 cents.

¿The proceeds are for the continued development of our products, especially our Phase III drugs, palonosetron and irofulven, for product commercialization and for working capital,¿ Brown said.

The company has announced the completion of enrollment in a Phase III trial for palonosetron, a 5HT-3 antagonist that affects serotonin and then suppresses nausea and vomiting in chemotherapy patients. In April, MGI licensed palonosetron from Helsinn Healthcare SA, of Lugano, Switzerland, for $11 million in up-front payments. (See BioWorld Today, April 11, 2001.)

¿It has a much larger plasma life compared to the currently marketed 5-HT3 antagonists, and in Phase II trials, it showed good control of chemotherapy-induced nausea and vomiting for the acute 24-hour period,¿ Brown said. ¿It also showed protection from the chemotherapy-induced nausea in days two to five.¿

The company has a series of trials for palonosetron, but this Phase III trial is designed to support the new drug application planned for early 2002, Brown said.

Irofulven is in a Phase III pivotal trial for advanced pancreatic cancer patients who have failed with Gemzar. Irofulven is the first product candidate being developed by MGI Pharma from its family of anticancer compounds called acylfulvenes. Brown said it has a novel mechanism of action with similarities to current alkylating agents, but distinguishes itself by its ability to stay active even against tumors that are known to be resistant to alkylators.

Brown said irofulven is rapidly taken up by tumor cells where it binds to DNA and protein targets within the cell to interfere with replication, causing selective inducement of apoptosis, or programmed cell death, in tumor cells.

¿We¿re expecting that trial to conclude enrollment in the third quarter of 2002,¿ he said. ¿Irofulven in previous trials has shown a very broad spectrum of activity against a number of solid tumors.¿ Phase II trials are studying the drug for ovarian and prostate cancers. Brown noted there also are combination trials under way for use of the drug in combination with Gemzar, Camptosar and Taxotere.

When the Phase III study for irofulven will finish depends on how long patients remain in the trial, but life expectancy for the types of patients in the trial tends to be quite short, Brown said. He said the company plans to file an NDA for irofulven in 2003.

MGI presented data from several trials on irofulven at this year¿s American Association for Cancer Research-National Cancer Institute-European Organization for Research and Treatment of Cancer conference in Miami Beach, Fla., this week. MGI presented data from two Phase II trials in ovarian cancer patients. The drug produced tumor responses when administered for four or five consecutive days every 28 days.

The company also has MG98, an anticancer drug, which has shown that selective inhibition of DNA methyltransferase results in tumor growth inhibition or tumor regression. MGI is conducting trials with MethylGene Inc., of Montreal. The two companies presented results on the safety and antitumor activity of MG98 at the Miami conference.

MG98 is a second-generation antisense oligonucleotide that targets mRNA for the nuclear enzyme DNA methyltransferase, which is responsible for silencing tumor suppressor genes. It¿s believed that preventing DNA methyltransferase production can allow tumor suppressor genes silenced by hypermethalation to be re-activated.

In its agreement with MethylGene, MGI has the exclusive license to develop, market and sell MG98 in North America, as well as any small-molecule inhibitor of DNA methyltransferase resulting from the two companies¿ collaboration.