By Matthew Willett
BioTransplant Inc. said it will place 2.83 million shares with institutional investors at $6.30 each, a 15 percent discount to a 10-day trailing average share price, for proceeds to the company of about $17.8 million.
Those proceeds will be used to advance BioTransplant¿s immune modulation therapy programs, including the AlloMune candidates, in addition to developing and commercializing its Eligix Cell Separation Systems.
CEO Eliot Lebowitz said the funding came at just the right time for BioTransplant, which has in recent months indicated it had only enough capital to carry it through mid-year. This funding, he said, along with a partnership in negotiation to distribute the Eligix Cell Separation System in Europe, gives the company a light at the end of the tunnel.
¿We announced at the end of the first quarter that we had $10 million in cash, and with the acquisition of Eligix our burn rate went from about $1 million a month to about $2 million a month,¿ Lebowitz said. ¿We¿re trying to aggressively develop and commercialize product lines in addition to the product lines we were working on at BioTransplant, and we¿re projecting that with the addition of the corporate partnership much of the burn rate of Eligix will be absorbed by the corporate partner between now and 2002. We¿re projecting a much more favorable cash position with a partnership expected to be completed in the third quarter.¿
BioTransplant took over the development of the Cell Separation System after its $55.3 million acquisition of Eligix in December. The high-density microparticle (HDM) device selectively removes either desirable or undesirable cells from transplantation material. (See BioWorld Today, Dec. 12, 2000.)
As part of the merger BioTransplant also acquired Eligix¿s pipeline, including two late-stage products.
One product is BCell-HDM, which is designed to purge malignant B cells from autologous stem cell transplants for lymphoma, myeloma and certain leukemias. The other is TCell-HDM, which is designed for graft-vs.-host disease-causing cells from therapeutic donor leukocyte infusions.
Another product waiting in the wings for a rejuvenated BioTransplant is MEDI-507. BioTransplant exclusively licensed MEDI-507 to MedImmune as an anti-rejection drug, with MEDI-507 potentially to be used to treat autoimmune diseases. The companies began collaborating in 1995. (See BioWorld Today, Oct. 13, 1995.)
¿MedImmune completed enrollment for a 120-patient Phase II trial in the U.S. with MEDI-507 intravenous administration in psoriasis, and is starting another 120-patient trial in Europe for subcutaneous administration with plans to complete Phase II trials this year,¿ Lebowitz said. ¿Early next year MEDI-507 could be in a position to represent a major cash flow, with MedImmune carrying the financial risk of development and commercialization.¿
BioTransplant uses its proprietary technologies under development to re-educate the body¿s immune responses to allow tolerance of foreign cells, tissues and organs. The company¿s products under development are intended to induce long-term functional transplantation tolerance in humans, increase the therapeutic benefit of bone marrow transplants, and reduce or eliminate the need for lifelong immunosuppressive therapy.
The company¿s AlloMune system continues, he said, to produce encouraging results in clinical testing, and BioTransplant continues to seek CE Mark approval for European marketing for the TCell-HDM system, and expects to receive a marketing go-ahead in Europe for that product in the third quarter.
Lebowitz said the 2.83 million shares placed privately this week will add to the company¿s fully diluted 20 million shares outstanding.
BioTransplant¿s stock (NASDAQ:BTRN) rose 9 cents Thursday, closing at $7.99.