By Mary Welch

To fund a Phase II trial of micellar paclitaxel for multiple sclerosis, Angiotech Pharmaceuticals Inc. intends to raise about $10.2 million (C$15 million) through a stock offering.

"We're not looking for a bunch of money," said Bill Hunter, chairman and CEO of the Vancouver, British Columbia, company. "We got very exciting results from our Phase I/II trial, and we're looking to fund a Phase II trial. We have to do monthly [magnetic resonance imaging (MRI)], and it'll cost about $10 million."

Hunter believes Canada is ripe for such offerings, particularly in the $15 million to $20 million range.

"The window in the U.S. for biotechnology companies is fairly closed, but that is not the case in Canada," he said. "Here, there is a renewed interest in biotechnology, and that's one of the reasons why we're doing this offering only in Canada. There's been a few secondary and follow-up offerings here that've been very successful this year."

The offering, led by Levesque Beaubien Geoffrion Inc., of Montreal, and Loewen, Ondaatje, McCutcheon Ltd., of Toronto, is expected to close by mid-July. The company has 11.8 million shares outstanding.

Angiotech's plan is to underwrite the Phase II trial, and then partner the drug for Phase III studies.

"We know our spot in the food chain," said Hunter. "We know we will have to partner. But there's been so many inflammatory drugs that have been disasters in trials. We believe we'd only get a reasonable deal if we can show human efficacy, which means a Phase II trial. Hopefully, we can recoup our costs. "Eventually, we'd like to be listed on NASDAQ, but you really have to have a late-stage drug to get noticed in the U.S.," he added. "That's our long-term goal once we mature a bit more: to raise our heads up in the U.S."

The planned Phase II trial will take place at seven Canadian centers, starting in November. About 150 patients will be enrolled in the double-blinded trial, which should last six months.

Angiotech uses paclitaxel - the generic name of Taxol, the best selling anticancer drug developed by New York -based Bristol-Myers Squibb Co. - for indications other than cancer, such as chronic inflammatory and angiogenesis-depended diseases. Among these conditions are multiple sclerosis, rheumatoid arthritis, and psoriasis. The company need not compensate Bristol-Myers, because the pharmaceutical firm lacks a composition-of-matter patent on Taxol.

"We were the first to look at paclitaxel for something other than cancer," Hunter said. "We've found encouraging results in our multiple sclerosis Phase I/II trial."

That study involved 29 patients with secondary progressive multiple sclerosis, a condition with no FDA-approved treatment. The patients at St. Michael's Hospital, in Toronto, received six monthly doses of micellar paclitaxel. They were evaluated for the drug's effect on overall disability and function, quality of life and changes in the amount of brain tissue scarring, as demonstrated by MRI testing. No side effects were found. For ethical reasons, the company has continued dosing trial participants.

"Most of those patients will continue taking the drug, so we'll have an additional six months worth of data. The bottom line is that the majority of patients improved," he said. "There were significant changes in the higher dosing group. We found the results not that surprising. We thought chemotherapeutic agents would be successful for chronic inflammatory and progressive disease. When we got the Phase I/II results, we decided to accelerate our Phase II trials."

Last July, the company started a Phase I study using micellar paclitaxel for the treatment of rheumatoid arthritis patients at the University of Los Angeles. A Phase I trial in the U.S. and a Phase I/II trial are under way, testing a topical paclitaxel gel for psoriasis.