LONDON - Therapeutic Antibodies Inc. (TAB) raised US$3.2 million in interim funding as the first stage of re-financing the company and said it will cut costs by ending a clinical trial of its CytoTAb antitumor necrosis factor (TNF) antibody in the treatment of sepsis.
The US$3.2 million, raised in a private placement, will fund TAB to the end of 1998. It involved short-term interest-bearing notes with warrants. The notes carry a 15 percent coupon and are repayable in 180 days. The five-year warrants provide for the purchase of up to an aggregate of 315,000 shares of common stock at an exercise price equal to the market price. The company's chairman, Martin Brown, and CEO, Andrew Heath, together subscribed for US$375,000.
“This will essentially keep the company going at the present rate until the end of the year,“ Heath told BioWorld International. “It therefore gives us time to put in place a broader round of financing to bring the company through to profitability.“
The broader financing will probably be via TAB's listing on the London Stock Exchange (LSE). However, Heath noted, “The LSE is the home base, but this company is neither here nor there. It is a U.S. incorporation, but traded in the U.K. It would be easier to finance if it were either a U.S. or a U.K. company.“ TAB's headquarters are in Nashville.
This is ironic, since the rationale for incorporating TAB in the U.S. was that, at the time, it was not possible to attract funding for biotechnology start-ups in the U.K.
Heath, who joined TAB three months ago, said he is reviewing the position and looking at the option of moving to the U.K. “It is not all bad news,“ he said. “We have got a strong clinical and regulatory group in the U.S., which most U.K. companies of the same size and development would envy.
“I would like to see a move to a broader-based round of financing. I am very optimistic we can do this, as I have shown by putting my own money in.“
This next round of fund raising will take place in the autumn.
Following Heath's appointment, TAB has carried out a review of its portfolio and has changed its approach to commercializing CytoTAb, its purified anti-TNF antibody.
It will now direct resources to disorders where the patient populations are relatively homogeneous and the onset of high levels of TNF can be predicted. Work carried out to date has shown that CytoTAb, a polyclonal antibody raised in sheep, is safe and effective in neutralizing circulating TNF.
As a result, a current Phase IIb study in sepsis will be closed. Heath said, “The new strategy for CytoTAb is not just to reduce cash burn, but that is one important factor. We have got a product in an area which is strewn with failures. I just did not feel it appropriate to put all our eggs in this one basket. We were going to need conclusive Phase III data to interest a major partner, given the current perceptions on sepsis.“
It has also been decided not to proceed with a study in renal transplants, which had been scheduled to commence this year. “The availability of new therapies means the supply of patients has dried up and this is no longer an indication worth pursuing,“ Heath observed.
CytoTAb To Target Other Diseases
TAB plans to start new studies looking at CytoTAb in Crohn's disease, meliodosis infections and coronary artery bypass surgery. Officials said initial trials in these indications will require relatively few patients and can be conducted rapidly.
Heath noted that, as a polyclonal antibody, CytoTAb has a higher affinity for TNF than infliximab, Centocor Inc.'s anti-TNF monoclonal antibody, which is close to marketing approval for the treatment of Crohn's disease.
He said TAB is quite happy to be a “me too“ company, coming up with a better product once someone else has proved the point.
In addition, a current Phase II study in cerebral malaria is continuing, with 56 of 100 patients enrolled. Completion of enrollment is due by the end of 1998.
Another study of 12 patients to evaluate the use of CytoTAb in cancer patients who suffer acute graft-vs.-host disease as a result of bone marrow transplants also will continue.
“We will look at the cerebral malaria trial when it is through and then think about going into other infectious diseases, for example, meningococcal meningitis,“ Heath said.
Results of the sepsis study, with 81 patients enrolled at the close, will be announced by the end of the year. “Obviously we will present the data to big pharma if it's good,“ he observed, “but the study will also give us a lot of safety information on CytoTAb.“ *