By Matthew Willett
SangStat Medical Corp. completed a $12.5 million private placement of 1.3 million shares with institutional investors to fund its operations focused on transplantation.
The financing took form in two tranches, with the first closing in late December and the second closing last week.
Participants in the institutional investment included Narragansett I.LP, Narragansett Offshore Ltd., Royal Bank of Canada and SDS Capital Partners LLC.
SangStat, headquartered in Fremont, Calif., will use the funding to further its clinical development programs, specifically, President and CEO Jean-Jacques Bienaime said, programs for Thymoglobulin in extended indications and ABX-CBL Anti-CD147, a monoclonal antibody under development in collaboration with Abgenix Inc., also of Fremont, for treatment of steroid-resistant graft-vs.-host disease.
"This is something we've worked on for the past couple of weeks to better our cash balance," Bienaime told BioWorld Today. "This will be in addition to our earlier expressed intention to sell our transplant pharmacy business, and depending on how much cash we can generate with that transaction we aim to move to profitability in Q4 ."
SangStat is pursuing expanded indications of Thymoglobulin, an anti-thymocyte rabbit immunoglobulin, to include transplant rejection and myelodysplastic syndrome.
Thymoglobulin was approved for marketing in the U.S. in 1998 for treatment of renal transplant acute rejection in conjunction with concomitant immunosuppression.
In its third-quarter earnings report, SangStat estimated North American Thymoglobulin sales in 2001 will range from $38 million to $42 million. The company further expects 2001 European sales to be between $23 million and $25 million.
Bienaime also highlighted the Abgenix-partnered ABX-CBL, calling the program "key."
"It's an anti-CD147 monoclonal antibody involved in a Phase II/III trial for treatment of steroid-resistant graft-vs.-host disease," he said. "It's scheduled to enroll 92 patients and that enrollment should be completed by the end of the year."
SangStat reported having $19.6 million in cash and equivalents as of Sept. 30. Its net loss for the first nine months of 2000 was $37.2 million.
Though Bienaime wouldn't comment on the company's current cash position, citing quiet period restrictions, he emphasized the company should reach profitability this year.
"Depending on the completion of the transaction involving the pharmacy business, this financing and that sale should allow us to move forward and take us into profitability," he said. "We anticipate breaking even in the fourth quarter of this year."
SangStat's stock (NASDAQ:SANG) closed Tuesday at $11.687, down 50 cents.