By Randall Osborne

West Coast Editor

As if its potential $150 million deal with Merck KGaA for the vaccines Theratope and BLP25 wasn¿t enough, Biomira Inc. closed a US$15 million private financing of convertible debentures and warrants to further boost the development plan.

¿Part of our agreement is that we pay 50 percent of trial costs going forward, and we¿re just making sure we have enough money to get to the goal post,¿ said Edward Taylor, chief financial officer of Edmonton, Alberta-based Biomira, which has about $65 million in cash.

¿Our burn rate is running about $31 million, so this gives us a little over two years,¿ Taylor added. ¿It¿s a bit of an uncertain world out there, so when you get a chance to lock something like this in, you do it.¿

Biomira entered the deal with Darmstadt, Germany-based Merck earlier this year. The companies will jointly market Theratope, a potential vaccine for breast cancer, and BLP25, for lung cancer, in the United States. Merck will have development and marketing rights in the rest of the world, except Israel and the Palestinian Autonomy Area. (See BioWorld Today, May 4, 2001.)

Theratope is in a pivotal Phase III trial for the treatment of metastatic breast cancer, with the first peek at data slated for the third quarter of 2003. The first interim analysis is expected by the third quarter of this year, and further interim analyses are due in 2002.

¿These trials are expensive and, as a finance guy, I have to plan on making it to the end, if necessary,¿ Taylor said.

A Phase IIb trial for BLP25 is enrolling in 10 cities in Canada and four in the United Kingdom. ¿We¿re probably looking at adding some additional sites for our non-small-cell lung program for BLP25, over the next two or three months,¿ Taylor told BioWorld Today.

The debentures in the most recent financing carry a 4 percent annual coupon rate, and a small number of investors participated, with Ladenburg Thalmann and Co. Inc., of New York, acting as placement agent.

Under the terms, the debentures may be converted into Biomira common shares at holders¿ options for $6 each, with maturity at 22 months but repayment in installments, the first being due Feb. 1, 2002. Warrants for 750,000 common shares were issued to the debenture holders at a fixed price of $6, with the term expiring Dec. 31, 2004.

The financing is structured to let Biomira repay the principal in cash or common stock. If the company pays by shares, the value of the shares is based on what was described as a ¿single-digit discount¿ to whatever the market price is then. Biomira also has a cash redemption option of the entire debenture offering at a premium, the company said.

Biomira¿s stock (NASDAQ:BIOM) closed Monday at $4.60, down 1 cent.