By Lisa Seachrist

Washington Editor

Titan Pharmaceuticals Inc. raised $41.4 million in a private placement of common stock to a group of institutional investors.

Titan sold 1.2 million shares of newly issued stock at $34.50 per share, an undisclosed discount to the market close when the deal was negotiated. The shares have yet to be registered and, for that reason, Titan isn't revealing who participated in the financing other than to say it's a combination of new and current investors.

"This financing enhances our cash position and will help accelerate the development of potential opportunities for selected products in clinical development within our portfolio," said Louis Bucalo, chairman, CEO and president of San Francisco-based Titan. "This will also give us the flexibility to look at the possibility of in-licensing opportunities."

Bucalo said the financing was completed in less than 48 hours and the shares sold represented less than 5 percent of the company. Once the shares are registered with SEC, Titan will have 24.1 million outstanding shares. The company now has more than $80 million cash on hand.

One of the primary moves for the company will to use the cash infusion to further the clinical development of its cancer vaccine, CeaVac, as a treatment for colorectal cancer. Titan recently expanded a Phase II study of the drug in patients with advanced colorectal cancer into a Phase III study following remarkable accrual and the lack of safety concerns with the drug, the company said.

The drug is currently unpartnered, and Bucalo noted the new funds would allow the company to partner CeaVac at a more advanced stage of development. However, he also noted the company had no intention of moving all of its unpartnered products ahead in this manner.

"We will continue to emphasize very conservative cash management with respect to our burn rate," Bucalo said.

Titan has two other major products in clinical development with partners. The company signed a deal earlier this month with Schering AG, of Frankfurt, Germany, to develop and commercialize Spheramine, Titan's treatment for Parkinson disease. That drug is in a Phase I/II trial in late-stage Parkinson's patients. (See BioWorld Today, Feb. 3, 2000, p. 1.)

In addition, Titan has a collaboration with Novartis AG, of Basel, Switzerland, to develop Zomaril (iloperidone) as a treatment for schizophrenia. The drug is in Phase III development. The first study in the series showed Zomaril reduced the symptoms of schizophrenia and schizoaffective disorder with fewer side effects than current therapeutic options.

Kevin Tang, senior biotech analyst with DeutscheBanc Alex. Brown Inc. in New York, wrote in a First Call note that the second of the three Phase III studies of Zomaril is accruing patients faster than expected and likely will conclude in early summer rather than later this summer.

Titan's stock (AMEX:TTP) closed Friday at $43.50, up $5.375.