By Vicki Brower

Special To BioWorld Today

Endorex Inc., a development-stage company based in Chicago, has raised $20 million in a private placement of common stock — $11 million more than originally planned.

Michael Rosen, president and CEO, said the offering was increased to meet investor demand. Funding came from institutional investors in the U.S., Japan, Europe and South America.

The gross proceeds include a first tranche of $2 million announced in mid-July. New York-based investment firm Paramount Capital acted as placement agent for the offering, which consisted of 8.6 million shares of common stock issued at a price of $2.312 per share.

Endorex, which is focusing on oral drug delivery, immune response regulation and cancer therapy, began in 1985 as ImmunoTherapeutics, based in Fargo, N.D. It held an initial public offering in 1987, and a secondary offering in 1992.

At its inception, Endorex was more academic in outlook, and focused exclusively on immune modulation based on technology brought in by company founder Gerald Vosika. After Michael Rosen came on board in August 1996 from Madrid-based PharmaMar S.A., he broadened the company's direction to include oral delivery of vaccines and cancer therapy, changed its name to Endorex in September 1996 to reflect those changes and added key members to the management team.

Late last year, Endorex formed a majority-owned subsidiary, Orasomal Technologies Inc., to develop a technology it licensed from Massachusetts Institute of Technology, in Cambridge, for oral and mucosal delivery of vaccines, proteins, hormones, allergens and other therapeutics with polymerized liposomes. Rosen wants to secure partners for Endorex for this drug-delivery technology and said he has had strong interest.

The company's second program — in immune response — is composed of its original macrophage activator technology, and also vaccine adjuvants. The first is based on its patented compound, ImmTher, a macrophage activator derived from muramyl dipeptide (MDP), a naturally occurring component of bacterial cell walls that has been tested in Phase I and II studies in advanced colorectal cancer. It has shown some efficacy as monotherapy in stopping disease progression and has a good toxicity profile. New clinical trials in pediatric cancer post-surgery and post-chemotherapy will begin in the near future to arrest micrometastases, Rosen said. Endorex is also considering using the drug in breast cancer.

Vaccine Adjuvant May Have Wide Application

The vaccine adjuvant developed by Endorex is related to MDP and called Theramide. It is capable of inducing protective responses to several experimental vaccines for certain cancers and chronic viral infections, including HIV and herpes. The company believes that Theramide may boost the body's response to many old and new vaccines, and is now completing preclinical work toward filing an investigational new drug application for use in an injectable influenza vaccine targeted to the elderly, and as an adjuvant for a therapeutic cancer vaccine.

In mid-1997, Endorex licensed a new cancer drug, perillyl alcohol (POH), from the University of Wisconsin, Madison. POH is a synthetic compound and a member of the monoterpene family, a class of natural anticancer compounds that are produced by fruits and vegetables. Monoterpenes have a number of mechanisms of action, including modulation of the cellular levels of growth factors and their receptors, and apoptosis.

Like MDP, POH has cytostatic activity. Monoterpenes also have been shown to selectively inhibit cell growth in a wide variety of rodent tumors and human cancer cell lines.

A group of Wisconsin university researchers led by Michael Gould had been developing POHs in conjunction with the National Cancer Institute (NCI). Based on recent results in Phase I studies in cancer patients, the Wisconsin Comprehensive Cancer Center will begin enrolling patients in three NCI-sponsored Phase II trials for breast and prostate cancer in the near future, said Rosen.

Endorex's stock (NASDAQ:ENDR) closed Thursday at $3.062, down $0.001. *

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