By Karen Pihl-Carey
NeoRx Corp. raised about $19 million through a private placement of 1.7 million shares to a group of institutional investors.
The company expects net proceeds to be around $18 million. It plans to use the funds for its Phase III trial of Skeletal Targeted Radiotherapy (STR) in multiple myeloma, which is expected to begin later this year. Proceeds also will advance NeoRx's other research and development programs, and will go toward other general corporate purposes.
"The company has completed enrollment of its Phase I and Phase II clinical trials [of STR], and we're now in that interim period preparing for the Phase III trial," said Paul Abrams, CEO of Seattle-based NeoRx. "We're certainly encouraged by the data that we've seen and felt that it was important to put this money on the balance sheet so we can continue to move this forward."
The stock was sold for $11 per share, the price negotiated between the company and the primarily new investors. NeoRx's stock (NASDAQ:NERX) closed Monday at $13, down 75 cents.
The company said it now has cash and cash equivalents of $36 million and about 23.5 million shares outstanding. Adams, Harkness & Hill Inc., of Boston, served as placement agent for the transaction. Roth Capital Partners Inc. acted as co-agent.
"We believe that we have a solid two years' cash," Abrams said. The company spent $15.4 million last year in operating expenses, he said.
The company is developing products to treat cancer. It has completed enrollment of Phase I and Phase II trials of its STR product combined with chemotherapy in patients with multiple myeloma. It plans to initiate a Phase III trial in the second half of this year. The product demonstrated in Phase II trials its ability to eliminate myeloma cancer cells in 12 out of 27 patients evaluated. The Phase III trial will be a multicenter, randomized, open-label trial. (See BioWorld Today, Feb. 7, 2000, p. 6.)
The STR product also is being tested in patients with Ewing's sarcoma at Children's Hospital and Regional Medical Center, in conjunction with the University of Washington Medical Center and the Fred Hutchinson Cancer Research Center in Seattle. Ewing's sarcoma is the second most common bone tumor in children and young adults.
NeoRx also is developing a proprietary Pretarget platform for the delivery of therapeutic products to tumor sites. In March, the company said a single dose of its Pretarget technology cured established human lung, colon and breast cancers implanted in mice. The study was published in the Feb. 15 issue of the National Academy of Sciences.