By Brady Huggett
EntreMed Inc. plans to offer approximately 1.7 million shares of its common stock, which, based on Monday's closing price of $24.437, would raise about $42 million for the anti-angiogenesis research company.
Gerard Klauer Mattison & Co. Inc., of New York, is underwriting the offering and has an option to purchase an additional 260,000 shares to cover overallotments. The shares will be issued pursuant to a shelf registration filed with the SEC. It said it would use the net proceeds from the offering for development of current and future products, working capital and general corporate purposes.
EntreMed's stock (NASDAQ:ENMD) dropped $2.562 Tuesday, or 10.5 percent, to close at $21.875.
"We are delighted that GKM is underwriting this offering, which will allow EntreMed to continue the aggressive development of our clinical stage oncology products," Joanna Horobin, executive vice president, commercial development at EntreMed, told BioWorld Today.
EntreMed, of Rockville, Md., focuses on inhibiting abnormal blood vessel growth associated with diseases such as cancer, blindness and atherosclerosis. It has nine product candidates in development, including its two lead products, Endostatin and Angiostatin.
Endostatin has shown in preclinical studies the potential to inhibit new blood vessels from forming and weaken the network of blood vessels that feed primary and metastatic tumors. It is in four Phase I trials now - three in the United States and one in Amsterdam, the Netherlands. Last week, EntreMed said U.S. Patent No. 6,174,861 issued from the U.S. Patent and Trademark Office covering all fragments of Endostatin protein that have anti-angiogenic activity. The patent is exclusively licensed on a worldwide basis to EntreMed from the Children's Hospital in Boston.
Angiostatin is a naturally occurring angiogenesis inhibitor that is a component of plasminogen, a protein involved in coagulation. Preclinical work on Angiostatin showed that it has cancer-inhibitory activity and EntreMed received FDA clearance to begin Phase I trials in late January 2000. It is in two Phase I trials in the United States - one in combination with radiotherapy - and a third trial in Europe. Like with Endostatin, EntreMed licensed the patent for Angiostatin from the Children's Hospital.
Beyond the two proteins, EntreMed has 2ME2 (now called Panzem), an endogenous, small-molecular-weight inhibitor of angiogenesis, in two Phase I breast cancer trials and a Phase II multiple myeloma trial. It also owns certain rights to thalidomide (Thalomid), a product licensed to Celgene Corp., of Warren, N.J., and EntreMed receives revenue from that agreement.
It has Metastatin in the preclinical stage, along with a tissue factor pathway inhibitor and a prostate-specific antigen. It has two small-molecular-weight inhibitor programs, where work is done with analogues of 2ME2 and thalidomide. A growth factor vaccine (FGF-2) has moved into preclinical studies. All are for the treatment of cancer.
The company has been developing a gene-based vaccine for malaria with funding provided by the World Health Organization and the National Institutes of Health, of Bethesda, Md. EntreMed has licensed malaria vaccine technology from the NIH, and preclinical testing is under way in Peru and Panama.
It's subsidiary, TheraMed, has two cell permeation technologies, one in the preclinical stage and the other in discovery.