By Brady Huggett
Genta Inc. raised $28.9 million through the private placement of common stock, and said the money gives it needed credibility, will fund trials and should help quicken the flow from its pipeline.
"It was necessary to get a critical amount of money for our planned series of registered trials over the next 15 months," said Raymond Warrell, president and CEO of Genta. "Also, this gives us credibility in our partnership negotiations. And, the development of a number of drugs in the pipeline was being slowed down, so we needed money to help push them along."
Genta, of Berkeley Heights, N.J., sold about 4.28 million shares of its stock in the deal via an equity placement, primarily through institutional investors. Lead institutional investors included SAC Capital, Narragansett Capital and Proquest Investments, all of New York.
Following the funding, Genta has approximately $53 million in cash with about 44 million shares outstanding, excluding warrants, Warrell said.
Warrell said the funds should be enough to fuel Genta's activities for two years.
"For the last quarter, we burned about $2.5 million," Warrell said. "That rate will rise - we should hit about $2 million a month by April, and then remain steady."
Genta focuses on the development of novel therapies for cancer. It concentrates on antisense research and is developing its proprietary Anticode products. Its lead product, Genasense, is in Phase II trials in combination with other drugs for colorectal, prostate, breast, small-cell lung cancer and acute leukemia. It also is in a Phase III trial in combination with dacarbazine for melanoma and has received fast-track and orphan drug designation from the FDA.
Separately, investigators from a Genasense clinical trial for advanced prostate cancer reported positive results Monday at the New Drug in Cancer Therapy Initiatives Symposium in Amsterdam, the Netherlands, the company said. In the study, Genasense was used to enhance the activity of taxane-based chemotherapy for treatment of patients with advanced, hormonally refractory disease. Four of the first eight patients treated who had not received prior taxane therapy showed objective antitumor responses on the combined program.
Warrell said Genta is seeking deals for its lead product.
"We are looking to license [Genasense] outside the United States for cash and royalties," he said. "In the United States, we have not decided, but the minimum acceptable deal will allow us to retain at least 50 percent of it. We want to market our own products, so at worst, we could always keep 100 percent and market it ourselves."
Genta's Gallium portfolio is split between Ganite, approved in the United States and Canada, and its oral gallium compounds. Ganite is an acquired drug that Genta will relaunch in the middle of next year and the oral gallium program is scheduled to speed up, Warrell said.
"Using the funding, we'll jump-start [the oral gallium] program and get that in clinical trials sometime in 2001," Warrell said. "And the funds will allow us to bring another antisense product in."
Warrell said the financing was a chosen sum.
"The amount we raised was carefully thought about," he said. "We felt this was a sweet spot, considering the minimum amount we needed to raise and accepting that we were raising on an unjustifiably low stock price."
Genta's stock (NASDAQ:GNTA) dropped $1.70 Monday, or about 18 percent, to close at $7.859.