By Randall Osborne
West Coast Editor
With $6 million under its belt from the Acqua Wellington North American Equities Fund Ltd., Cytogen Corp. entered into an equity financing facility for up to $70 million to advance its proteomics work.
"They were done in two separate pieces," said Richard Krawiec, vice president of investor relations for Princeton, N.J.-based Cytogen.
The $6 million came through the sale of 902,601 registered shares to Acqua, of New York, Krawiec said. At Monday's closing price (NASDAQ:CYTO) of $5.656, that number of shares would have garnered only about $5.1 million. Cytogen's shares ended Tuesday at $5.59, down 6 cents.
In March, Cytogen filed to offer 6 million shares, which would have raised about $51 million at trading prices then. The offering was scrapped because of unfavorable market conditions. (See BioWorld Today, March 30, 2000, p. 1.)
"We put those shares on the shelf and used 2 million of them to acquire [imaging agent] product rights from Advanced Magnetics," of Cambridge, Mass., Krawiec said. Now, having used 2 million shares in the Advanced Magnetics Inc. deal, and having sold almost another million to Acqua, Cytogen has about 3 million registered shares left.
Under the $70 million equity financing arrangement, Cytogen may sell additional shares of stock over a 20-month period to Acqua at a small discount to the market price.
"We don't have to use [the facility] if we don't want to," Krawiec noted, and no fees are required as part of the deal.
Cytogen's subsidiary, AxCell Biosciences Corp., is developing with InforMax Inc., of Bethesda, Md., a protein pathway database, called the Inter-Functional Proteome Database, to which AxCell aims to offer multiyear subscriptions for partners.
"We expect to launch in the first part of next year," Krawiec told BioWorld Today.
"We're really two companies," he added. "This flowed out of the reorganization of the company a little over two years ago." At that time, Cytogen shut down its subsidiary, Cellcor Inc., which was focused on autologous lymphocyte therapy, and cut staff by 30 percent, vowing to "implement other measures as needed to ensure progress toward achieving stockholder value." (See BioWorld Today, Sept. 18, 1998, p. 1.)
The database effort by Cytogen is really more than that, Krawiec said.
"Not only are we mapping protein signaling pathways, but we'll be able to sell protein arrays," he said.
In the oncology area, Cytogen has three approved products on the market: Quadramet for the treatment of cancer-related bone pain; ProstaScint, a diagnostic for prostate cancer; and OncoScint, a diagnostic for ovarian and colorectal cancer.
The company acquired Allendale, N.J.-based Prostagen Inc. in June 1999 to regain its exclusive proprietary rights for immunotherapy to prostate specific membrane antigen (PSMA), and then entered into a joint venture with Progenics Pharmaceuticals Inc., of Tarrytown, N.Y., to develop PSMA technology for vaccine and antibody-based therapies for the treatment of prostate cancer. Prostagen had licensed PSMA technology to Cytogen in January 1997. (See BioWorld Today, June 17, 1999, p. 1.)
The Acqua fund, which has been gaining an increasingly higher profile in biotech financing, focuses on life science and technology, dealing with mid-cap and small-cap publicly traded companies.