By Matthew Willett
Cell Pathways Inc. completed a $23.6 million stock and warrants offering Friday, selling 3.2 million shares, plus that many warrants for the purchase of 1.35 shares at $12 per share, for $7.375 per combined share and warrant.
The Horsham, Pa., company develops treatments for cancer. Its platform, Selective Apoptotic Anti-Neoplastic Drugs, inhibits cyclic GMP phosphodiesterase and selectively induces apoptosis.
The lead drug from that platform, Aptosyn, was declared not approvable by the FDA in September. (See BioWorld Today, Sept. 26, 2000.)
Although the company's stock (NASDAQ:CLPA) dropped drastically on that news, a 69 percent dive from $29.99 to $9.312, Patrick Mooney, Cell Pathways' spokesman, said the company is far from finished.
Cell Pathways' stock closed Friday at $7.375, down 18.8 cents.
"A lot of people think that when this happens the company is dead," Mooney told BioWorld Today. "That's not the case at all. This shores up our balance sheet, and it gives us cash for development of our products."
He added that the financing is indicative of the strength of the company's science.
"It shows there is still an interest in the company," he said. "As our chief scientific officer has said, it's a regulatory event, not a scientific event. More and more people are believing in the science - we've had a couple of papers published validating the mechanism of action - and there's a faith in the science and people are committed. They believe in the science and have seen the science and are committed to participating through approval."
Janney Montgomery Scott LLC and Jackson Boulevard Ventures LP acted as placement agents for the private placement with selected institutional investors.
Past investors led the financing, but remained unidentified.
Mooney said the financing will shore up the company's balance sheet to provide funding for operations, including efforts at developing its two lead compounds.
"It's generally for the development of our two lead compounds," Mooney said, "our lead candidate Aptosyn and CP461, a second-generation compound with a broad cancer indication that's much stronger and so far has a better safety profile than our lead compound."
He said the company typically burns about $25 million annually. At the end of the third quarter, he said, Cell Pathways had about $31 million in the bank.
He added that little has changed in the company's plans for lead compound Aptosyn.
"We've notified the FDA that we intend to amend the NDA, and we're seeking a meeting for further clarification of the nonapprovable letter," he said.