By Mary Welch
Biomira Inc. drew down $29 million from its $100 million equity line financing to help underwrite its Phase III and II cancer trials.
"We actually registered with the SEC for an equity line financing of about $36 million in late September," said Edward Taylor, the company's chief financial offer. "We wanted 24 drawdowns over 30 months. Back then, our stock was about $2 to $3. But in late January, on the strength of our stock and the increase in trading activity, we were able to go to $100 million without issuing additional shares. Our stock has gotten as high as $19.125, on March 3."
The credit line was from Paul Revere Capital, of New York, with the support of a group of European investors. Under the original agreement, Biomira had the right to draw down $36 million over the next 30 months in $3 million installments. For each installment, Biomira has the right to set a threshold priced below which it is not obligated to sell its stock. The price for each drawdown is based on the average trading price of the company's common shares over a specified period of time.
The company now will have 34 drawdowns over a 42-month period, Taylor said.
The company, based in Edmonton, Alberta, has 45.5 million shares outstanding, and about $48 million in cash.
The money will be used fund the company's Phase III trial of Theratope, a synthetic, carbohydrate-based vaccine. The vaccine includes a synthetic antigen that mimics natural Stn, a cancer-associated epitope, the expression of which is associated with disease progression. It is conjugated to a high-molecular-weight protein carrier, Keyhold Limpet Hemocyanin (KLH). The vaccine stimulates the patient's immune system to attack cells carrying Stn.
The trial is evaluating Theratope's effectiveness in treating patients with metastatic breast cancer following first-line chemotherapy. The four-year trial is taking place at more than 100 sites. (See BioWorld Today, Dec. 1, 1998, p. 1.)
After strong Phase II results for Theratope, Biomira signed an option agreement to regain all the rights held by marketing partner Chiron Corp., of Emeryville, Calif. The two had been partners in the project since May 1997. Under the agreement, Chiron would have been responsible for the marketing of Theratope in the U.S., Europe, Australia and Japan. However, Chiron's priorities changed and Biomira agreed to make an undisclosed cash payment to Chiron in exchange for those marketing rights. (See BioWorld Today, Sept. 7, 1999, p. 1.)
With Chiron out of the picture and Biomira obtaining the original $36 million equity line at the same time, Biomira decided to fund Theratope's development on its own.
"We expect patient enrollment to be finished in the second half of this year with an interim look at the trial about six months after that," Taylor said.
In addition, the company will use the funds for its Phase II trial of BLP25 for patients with non-small-cell lung cancer. The BLP25 vaccine incorporates a synthetic 25-amino-acid sequence of the UMC-1 cancer vaccine, encapsulated in a synthetic liposomal delivery system.
Biomira reported net loss of a $21.33 million in 1999.
Biomira's stock (NASDAQ:BIOM) closed Friday at $12.43, down 56.2 cents.