By Lisa Seachrist
Looking to fund advanced clinical trials in its melanoma and ovarian cancer vaccine products, Avax Technologies Inc. raised $25 million in a private placement of common stock and warrants to a group of existing and new investors.
The Kansas City, Mo.-based company sold 2.26 million newly issued shares of stock at $11.125 a share, approximately a 10 percent discount to the market price last Tuesday. The company also issues warrants to purchase 225,951 shares of common stock at $12.79 per share. The warrants expire on March 10, 2005. New York-based investment bank Gruntal & Co. L.L.C. acted as placement agent.
¿From our perspective, this offering was a great opportunity for us,¿ said Richard Rainey, controller for Avax. ¿This cash will see us further down the road of clinical development.¿
With the sale of stock, Avax has approximately 18.5 million shares outstanding and $32 million cash on hand. Rainey estimated the cash would fund the company for two to three years while it proceeds with the clinical development of its autologous cell vaccines. The major expenditures for Avax during that time will be the completion of a Phase II pivotal registration study of its melanoma vaccine, M-Vax, and the Phase II program for its ovarian cancer vaccine, O-Vax.
Both M-Vax and O-Vax are made from a patient¿s own cancer cells, which are modified with a ¿hapten¿ molecule. The process makes the tumor cells appear foreign to the patient¿s immune system in order to elicit a tumor-killing response.
M-Vax has orphan drug status and is currently in a pivotal Phase II study designed to enroll 400 melanoma patients with Stage III disease. The company has recently initiated the first of several Phase II studies testing the ability of O-Vax to sensitize a patient¿s immune system to ovarian cancer cells. The company is looking at several different stages of ovarian cancer in this series of studies.
¿The likely timing for a BLA for these products is sometime in 2002 or 2003,¿ said Jeffry Jonas, president and CEO for Avax.
In addition to its autologous cell vaccine technology, Avax has two cancer programs in preclinical development: topoisomerase inhibitors and anti-estrogens. The company has chosen lead drug candidates in both of these programs and intends to advance them into the clinic either at the end of this year or in 2001.
¿With the anti-estrogen program we will target breast cancer first,¿ Jonas said. ¿The topoisomerase inhibitor lead doesn¿t appear to have the same [gastrointestinal] toxicities associated with other topoisomerase inhibitors so it may be a good agent to use in colon cancer.¿
Avax¿s stock (NASDAQ:AVXT) closed Monday at $13.75, down $1.125.