By Mary Welch

A day after announcing that it will start Phase III trials for the treatment of metastatic pancreatic cancer, Aphton Corp. raised $16.22 million from a private financing with several international biotechnology and health care funds.

Aphton placed 491,515 shares of common stock at $33 each.

¿They¿ve been making things happen,¿ said Jefferson Davis, president and director of research for SmallCaps Online LLC, of New York. ¿They have been flying under the radar screen, but we started covering them last August when their stock was around $16. They¿ve been able to go out and raise $16 million at full price with no warrants or other dilutive measures companies use to try to get money. The fact that they can raise this money when the market is really bad tells you something, and institutional investors are starting to take notice.¿

Morgan Stanley Dean Witter and Gruntal & Co., both of New York, assisted in the placement.

The proceeds will be used to finance the Miami-based company¿s Phase III trials using its antigastrin vaccine to treat patients with advanced pancreatic cancer and advanced gastric cancer. (See BioWorld Today, April 12, 2000, p. 3.)

¿They¿ve got an interesting approach to treating cancer ¿ a hormone therapy approach,¿ Davis said. ¿They¿ve got a few Phase II and [Phase] III trials in process. The data they¿ve been reporting has been really compelling.¿

The standard treatment for pancreatic cancer is Gemzar, a drug marketed by Eli Lilly & Co., of Indianapolis, which had sales of $450 million in 1999 and anticipated 2000 sales of $550 million. The median survival rates in two published Gemzar trials were 4.8 months (on 2,380 patients) and 5.7 months (Gemzar vs. 5-fluorouracil), and included a number of patients with less advanced disease.

¿In Aphton¿s Phase II data, there was an overall median survival rate of 6.7 months, compared to Gemzar¿s 4.8 months in one trial, which is pretty compelling,¿ Davis said. ¿Those taking the higher dose level had a median survival rate of 7.3 months. I see Aphton¿s vaccine as being at least as big as Gemzar in pancreatic cancer and even bigger when you have additional applications like gastrointestinal and stomach cancer.¿

Aphton is targeting a naturally occurring hormone, gastrin 17, which has been found to play an important role in the growth and proliferation of gastrointestinal tumors, as well as in the secretion of stomach acid. The company has developed immunogens against this hormone, as well as hormones involved in the growth of reproductive cancers.

In an effort to treat these diseases, Aphton¿s therapies block the action of the gastrin hormone. Rather than using a small-molecule therapeutic, Aphton is trying to ¿train¿ the body¿s immune system to produce antibodies against the specific form of gastrin that fuels the disease process. The antibodies then should bind to the gastrin molecules and block their action, thus reducing the level of gastrin in the body.

Although the vaccine is partnered with Aventis Pasteur, of Lyon, France, Davis said the deal¿s structure is of great benefit to Aphton.

¿Aphton funded the trials themselves rather than getting the money up front like so many small biotechnology companies,¿ Davis said. ¿It¿s an unusually lucrative deal for Aphton and they¿ll be splitting the profits about 50-50 with Aventis. It¿s not your typical deal.¿

Aphton officials were not available for comment.

Aphton¿s stock (NASDAQ:APHT) closed Wednesday at $29.5, down $2.

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