By Brady Huggett
StressGen Biotechnologies Corp. filed in Canada and the U.S. for a public offering of 6 million shares of common stock, which would raise C$46.2 million (US$31.2 million) if sold at Thursday's opening price.
Its stock (TSE:SSB) closed Thursday at C$7.10, down C60 cents, on the Toronto Stock Exchange. The company has approximately 47.7 million shares outstanding.
The offering is being led by BMO Nesbitt Burns Inc., of Toronto, and includes CIBC World Markets Inc., of New York, and Goepel McDermid Inc., of Vancouver, British Columbia. The offering is expected to close by mid-October.
StressGen, of Victoria, British Columbia, said it will use the net proceeds to fund the development for its lead product candidate, HspE7, for conditions caused by human papillomavirus. HspE7 is a recombinant fusion product composed of stress protein 65 (Hsp65) from Mycobacterium-bovis BCG and the protein E7, intended to elicit a powerful immune response. Stress proteins provide protection from cellular damage and ensure the proper folding of other proteins in normal cells.
HspE7 is being investigated for the treatment of cervical neoplasia, anal neoplasia, genital warts and cervical cancer, and is already in or scheduled for Phase II and Phase III testing in those indications. (See BioWorld Today, June 6, 2000, p. 1.)
StressGen also has product candidates in development at the research stage for allergy and asthma and the company has developed a number of Hsp-antigen constructs using various antigens, including those from the hepatitis B virus.
In 1998, StressGen formed drug discovery collaborations with the University of Miami, the University of Connecticut and Hartford Hospital to develop novel assays and screen chemical libraries to identify small molecules that effectively modulate the cellular production of stress proteins.
The company's second-quarter results showed a net loss of C$5.85 million (US$3.93 million) and it had C$36.1 million (US$24.3 million) in cash, cash equivalents and short-term investments at the end of June.