By Mary Welch
AltaRex Corp. plans to raise about $11.5 million (C$17 million) through a Canadian public offering to fund its clinical trials of OvaRex MAb and BrevaRex MAb.
The company is offering up to 34 million common shares at a price of 34 cents (C$0.50) each, with an optional additional 5.1 million shares available to the financing agents. If the option is exercised, it would bring in another $1.7 million in gross proceeds.
The company has 16.5 million shares outstanding, not counting the proposed 39.1 million from this offering. The closing should occur about May 6.
¿Raising this capital sends a strong signal that the market in Canada still is fully supportive of our technology and products. The offering is largely sold out,¿ said Edward Fitzgerald, senior vice president and chief financial officer at AltaRex.
Headquartered in Edmundston, Alberta, with executive offices in Waltham, Mass., AltaRex wanted to make ¿money for its Canadian investors before seeing the U.S. capital market,¿ said Fitzgerald. ¿We¿re better known in Canada than in the U.S., which is another reason why we did the offering in Canada. I don¿t think it¿s any easier in the capital market for small biotechnology companies in Canada than in the U.S.¿
AltaRex¿s first round of significant financing occurred shortly after its founding in 1996, when $18 million was raised. This is the second round.
First Marathon Securities Ltd., of Toronto, will serve as lead agent. HSBC James Capel Canada Inc., also of Toronto, is the other agent.
The funding will go toward financing Phase IIb trials of OvaRex for ovarian cancer and a Phase I trial of BrevaRex for multiple myeloma.
The company¿s products are based on its proprietary platform technology, Anti-idiotype Induction Therapy, which it believes enhances the immune system¿s ability to produce a highly effective antitumor response.
OvaRex is a novel modified monoclonal antibody-based immunotherapeutic that is specifically associated with the ovarian cancer antigen CA125. There are two Phase IIb trials under way.
¿They may, in fact, become pivotal trials,¿ Fitzgerald said.
The first trial is taking place in both Canada and the U.S., and so far has enrolled 235 of the anticipated 280 patients. It should finish by the end of the third quarter. The second U.S.-only trial will finish enrolling 102 patients by the end of the year.
In addition, the company also is conducting two open-label Phase II trials with late-stage ovarian cancer patients, and so far 11 of the minimum 19 patients have been enrolled. These open-label trials should provide preliminary immunology data in the second half of this year.
BrevaRex is in Phase I studies, with four of the needed 15 patients enrolled. Multiple myeloma is a rarely curable hematological malignancy related to leukemia and lymphoma. There were an estimated 12,700 new cases diagnosed in the U.S. in 1998, with 11,300 associated deaths.
¿We have two other products currently in preclinical evaluation, but there are no definite timetables for those,¿ Fitzgerald said. ¿Right now, we¿re concentrating on the two in trials.¿ n