By Randall Osborne
West Coast Editor
With a court fight pending over Canadian rights to its lead experimental AIDS drug based on already-approved procaine hydrochloride, Steroidogenesis Inhibitors International Inc. sold $10 million in stock to Fusion Capital Fund II LLC - with an option to require Fusion to buy $10 million more during the two-year arrangement.
Janet Greeson, CEO of Las Vegas-based Steroidogenesis, said the deal is more than a case of backers gambling on a skin anesthetic against HIV.
Researchers "always believed procaine was an anti-cortisol drug," she said. "It works at the cellular level, and that's where we are headed."
Fusion, of Chicago, will buy up to $10 million in stock over 25 months, taking $400,000 each month at the selling price, and Steroidogenesis can compel Fusion to buy more each month, up to $10 million more in total.
"When our stock price hits a certain level, say $5, we can pull in the rest of the aggregate [in monthly installments]," Greeson told BioWorld Today. The shares (OTCBB: STGI) reached that range in March. The stock closed unchanged Monday at $3.06.
Proceeds will fund development of Anticort, which is based on procaine hydrochloride, or HCl, and modulates immune response by "negating cholesterol" and thereby inhibiting adrenal cortisol synthesis, she said.
The drug is in a Phase Ib/IIa trial in HIV, testing 24 patients - some also taking protease inhibitors, some not, Greeson said, adding that an earlier open study showed the drug did better without the other AIDS drugs than with them.
"It's a capsule you take twice a day, and it's basically void of side effects," Greeson said. Also, at about $100 per month, it would be far cheaper than current AIDS treatments.
The rights dispute is with Edmonton, Alberta-based Altachem Pharma Ltd. over the scope of a license agreement with Altachem. A trial is expected to begin next April.