ImmunoGen Inc., faced with dwindling cash reserves, secured acommitment for up to $12 million in equity financing to supportdevelopment of its oncology drugs, including a promising treatmentfor colon cancer that is in preclinical studies.
"This money puts us in a position to execute our business plan for thefirst time in a couple of years," said Mitchel Sayare, chairman andCEO of ImmunoGen.
In late 1994, the Cambridge, Mass., company slashed its staff by 60percent, reduced senior management salaries by 20 percent andsuspended new product programs to conserve resources for continuedclinical development of its lead cancer treatment, Oncolysin B. Thedrug combines a monoclonal antibody with a modified form of theplant toxin, ricin, to attack B-cell lymphomas and leukemias.
Oncolysin B is in numerous clinical trials, including a Phase III studyfor killing residual cancer cells in non-Hodgkin's B-cell lymphomapatients following autologous bone marrow transplants to treat thedisease.
The company's cutbacks in December 1994 were implemented afternegotiations with potential corporate partners proved unsuccessful.(See BioWorld Today, Dec. 20, 1994, p. 1.)
"We've been living pretty much hand to mouth," Sayare saidWednesday. "Now we have the money we need for at least 18months. My hope is that Wall Street recognizes we're not about to goout of business tomorrow and they can focus on things of real valuelike our products and technology."
In addition to Oncolysin B and other Oncolysin products in clinicaldevelopment for small cell lung cancer and acute myelogenousleukemia, ImmunoGen's pipeline includes C242-DM1, which hasdemonstrated effectiveness against colon cancer in preclinicalstudies.
The drug, C242-DMI, combines a monoclonal antibody targetingglycoprotein antigens on colorectal cancer cells and a toxin derivedfrom maytansine, a natural product found in an African shrub,Maytenus serrata, and the microorganism, Nocardia.
Preclinical studies showed the immunoconjugate, C242-DMI, wassuccessful in eliminating colorectal tumor cells in mice. (SeeBioWorld Today, Aug. 6, 1996, p. 1.)
ImmunoGen officials said the early studies suggest C242-DMI couldbecome a first-line therapy for colon cancer.
ImmunoGen's $12 million financing involves the sale of convertiblepreferred stock to an undisclosed institutional investor. Theplacement was directed by Brown Simpson LLC, a New Yorkinvestment fund adviser.
The agreement enables ImmunoGen to sell up to $3 million inpreferred stock in any quarter through March 31, 1998. The companyalready has received $3 million in equity capital. Terms of thepreferred stock, including the price per share and conversion ratewere not disclosed.
At the close of ImmunoGen's fiscal year, June 30, 1996, the companyhad $2.7 million in cash and reported a net loss of $16.5 million forthe previous 12 months.
ImmunoGen's stock (NASDAQ:IMGN) closed Wednesday at $3.50,down $0.125. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.