By Mary Welch

Novavax Inc. raised $11.25 million in a private placement in order to complete Phase III trials of Estrasorb, its topical estrogen replacement therapy.

¿This is really the first time we¿ve done a real institutional placement and we are very happy with those who invested in us,¿ said John Spears, Novavax¿s president and CEO. ¿When we started this, back in mid-November, we were looking for between $6 million and $10 million. It was oversubscribed and we decided to take the money.¿

The Columbia, Md.-based company sold 2.8 million shares of its common stock at $4 a share and 700,000 warrants exercisable at $6.75. Net proceeds to the company were about $10.5 million. With the placement, Novavax has about 18 million shares outstanding.

Novavax¿s stock (AMEX:NOX) closed Wednesday at $7, up 37.5 cents.

¿This will last us about two years,¿ Spears said. ¿We have a low burn rate and we generate some revenue, which helps.¿

The lead investors were SAFECO Growth Fund and SAFECO Resource Series Trust Growth Portfolio, both of Seattle, and RS Investment Management, of San Francisco.

The Phase III trial involves 200 women, half of whom are receiving placebo and half 7.5 mg daily of Estrasorb for 12 weeks. The study is designed to measure Estrasorb¿s ability to deliver 17 beta estradiol through the skin when applied as a topical lotion. The clinical endpoint is the reduction of hot flashes in menopausal women.

¿We expect to finish the Phase III trial by the end of the summer and file our NDA [new drug application] in the fourth quarter,¿ Spears said. ¿We also have other products in the clinic that we will develop using some of this money.¿

Estrasorb is not partnered.

¿We¿ll be looking at that as we go forward,¿ he said. ¿It is an option, but we would like not to make any decision on partnering until we finish Phase III.¿

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