By Brady Huggett
Cytovax Biotechnologies Inc. sold more than 1.9 million special warrants at C$4 last week, pulling in C$7.9 million (US$5.1 million) for the company that is looking to wipe out infectious diseases in hospitals.
The special warrants were sold in September and October in private placements. Acumen Capital Finance Partners Ltd., of Calgary, Alberta, and Goepel McDermid Inc., of Vancouver, British Columbia, acted as agents in connection with the sale.
Cytovax will use the proceeds to fund the filing of an investigational new drug application and a planned 2001 Phase I trial for its lead product, Cytovaxine. It also will fund preclinical development of its monoclonal antibody therapy and extend its Anti-Adhesion Platform Technology (AAPT).
Cytovax, of Edmonton, Alberta, was birthed through the merger of Biotex Laboratories Inc. and S.P.I. Synthetic Peptides Inc., both of Edmonton, in April 1998. Company officials said they were in a quiet period and could not comment.
Much of Cytovax's efforts are aimed at Pseudomonas aeruginosa, a pathogen prevalent among hospital-acquired infections and the most common cause of hospital-acquired pneumonia. Cytovaxine is a vaccine for the prophylaxis of Pseudomonas infections in patient groups at high risk for acquiring it; the primary market is considered to be immunocompromised patients with hospital-acquired infections. Cytovax said AAPT, researched over the past 10 years at the University of Alberta, could give rise to vaccines and monoclonal antibodies against other pathogens such as Streptococcus pneumoniae, Moraxella catarrhalis and Haemophilus influenaze.
Cytovax raised C$1.5 million in 1998 through a common share placement with Business Development Bank of Canada, of Montreal, and Royal Bank Ventures Inc., of Toronto. It added another C$1 million through a convertible loan from the same investors in November 1999. In June, Cytovax received C$2 million through an equity investment by BioChem Pharma Inc., of Laval, Quebec, as part of a collaboration and licensing agreement.
The collaboration agreement called for further development of Cytovaxine and, using Cytovax's AAPT, development of a monoclonal antibody to be used either as a preventive or therapeutic agent.
Besides investing the C$2 million equity stake, BioChem said it would commit research funding and expertise, and Cytovax stands to earn development milestone payments and royalties on sales of products stemming from the agreement. BioChem possesses the worldwide rights to develop, manufacture and market the products. Initial development of products will be conducted at Cytovax's facilities, but BioChem will handle any final development.