By Matthew Willett
AlphaVax Inc. raised $11 million through a private placement of Series C convertible preferred securities with American and European investors.
The Durham, N.C.-based company said the offering was oversubscribed and it could have raised even more.
This round, coupled with the company's $8.2 million Series B financing earlier this year and seed funding, brings the company's total financing raised to $19.5 million. CEO Peter Young said AlphaVax will use the funds to expand its corporate operations.
"One of the objectives of raising these funds is to enable us to begin building more in-house projects beyond our HIV vaccine," he said. "We do have licensing agreements and other corporate partnerships under way, but to date we haven't moved beyond our own lead product in terms of in-house projects."
AlphaVax formed in January 1998, with $500,000 from local investors coming in June of 1999, Young said. The Series B round came in March.
Burton Advisers Ltd., of London, acted as the placement agent for the series. Investors included health care funds, mainly European, financial institutions and a small percentage of individual investors.
"We originally set out to raise as much as $10 million," Young said. "This is somewhat opportunistic. Granted, we would been satisfied with substantially less than $10 million, but we set a target of $10 million and oversubscription made it close to $11 million. We wanted to close it off and move on. I think we felt we'd gotten the majority of the interest and to continue would not have been fair to investors who'd come on board early in the process."
AlphaVax pursues the development and commercialization of vaccine vector technology. It plans to begin clinical trials on its lead product, an HIV vaccine, next year.
It's currently partnered with the International Aids Vaccine Initiative (IAVI) in London in a collaboration worth $4.6 million.
"That is substantially funded by grant supported by the International AIDS Vaccine Initiative and the National Institutes of Health. We have only one formal existing corporate licensing agreement, with American Home Products' Vaccine Division, Wyeth-Ayerst Laboratories," Young said.
The company plans, however, to seek out further partnerships. "We have a number of active negotiations and discussions for partnerships under way. I think there will be lot more on that front in the next six to 12 months."
The AlphaVax technology originally was discovered by its scientific founders at the University of North Carolina, Chapel Hill, and the U.S. Army Research Institute for Infectious Disease. The company is collaborating with researchers at the University of Capetown in South Africa; Children's Hospital of Columbus, Ohio; and the University of North Carolina.
The IAVI is funded by a group that includes private foundations and public companies. It negotiated a deal with AlphaVax in which the a successful vaccine would be made available at a reasonable price in developing countries.