By Randall Osborne
West Coast Editor
InterMune Pharmaceuticals Inc. raised $76 million in a private placement, partly to push its osteopetrosis drug, Actimmune (interferon gamma-1b), and Xcyte Therapies Inc. closed on a Series D equity financing that garnered $28 million for a T-cell-boosting therapy called Xcellerate.
Palo Alto, Calif.-based InterMune's injectable drug slows the overgrowth of bony structures by reducing the activity of osteoclasts in osteopetrosis, a rare genetic disease that afflicts mostly children. It was approved for the indication in February.
"We're going to continue to seek to consolidate worldwide rights where possible or [sign up a] partner," said Tim Lynch, chief financial officer of InterMune. "We have all rights in Canada, and certain rights in Japan, mainly in infectious disease."
Genentech Inc., of South San Francisco, first won approval in 1990 to market the drug to treat chronic granulomatous disease. InterMune since has licensed all rights, and is developing Actimmune in other indications. (See BioWorld Today, Feb. 14, 2000, p. 1.)
"We just started Phase III trials for multidrug-resistant tuberculosis, and in four to six weeks, we'll start a Phase III trial in idiopathic pulmonary fibrosis [IPF]," Lynch said.
As part of its lead program in fibrotic disease, the company is investigating Actimmune's potential in conditions such as liver cirrhosis, kidney fibrosis and forms of interstitial lung disease other than IPF, Lynch said.
Actimmune also is in Phase II trials for cryptococcal meningitis.
"We'll look at that data in the first half of next year," Lynch said. "We're also going to start two other Phase II trials toward the end of this year - one in another systemic fungal disease and one in cystic fibrosis."
Lynch said InterMune, which sold 2 million shares at $38 each, will be using the money also to "backward integrate" its pipeline, shopping for molecules that are either in Phase I trials or are six to 12 months away from Phase I trials.
"It's kind of the opposite of what other biotechs have, probably because we're a spinout," Lynch said, noting that many have products in early-stage research and are looking to buy a later-stage drug. InterMune spun out of Connetics Corp. last year, and went public in March with 6.25 million shares sold at $20 each, raising $125 million. (See BioWorld Today, June 30, 1999, p. 1; and March 27, 2000, p. 1.)
Prudential Vector Healthcare Group, a unit of Prudential Securities Inc., acted as lead placement agent in the latest financing. Lehman Brothers and UBS Warburg LLC acted as co-placement agents.
The company's stock (NASDAQ:ITMN) closed Thursday at $42.109, up 6 cents.
Xcyte Placement Follows $12M Deal In July
Privately held Xcyte, of Seattle, is testing Xcellerate in kidney cancer and other forms of cancer, as well as immune-system conditions such as HIV. The company raised $12 million last month in a placement of preferred stock. (See BioWorld Today, July 29, 2000, p. 1.)
Included in the round - led by a new investor, MPM Capital - are existing investors Alta Partners; ARCH Venture Partners; Falcon Technology Partners; Fluke Capital Management; The Sprout Group/DLJ; Tredegar Investments; and Vulcan Northwest. More institutional funding came from Vector Fund Management and MGN Opportunity Group.