Cell Therapeutics Inc. raised $25.6 million in a self-managed privateplacement with institutional and accredited individual investors - afinancing that represents 38 percent of the total $67.3 million raisedby private companies to date this year.
It's been a tough year for financing in the sector - biotech raised$237 million from public and private sources combined in 1995 todate. For the same period in 1994, the industry raked in $758.3million. (For more on the industry's financing woes, see BioWorldFinancial Watch, March 6, 1995.)
The privately held Seattle company has raised about $80 millionsince its founding in 1992. EGS Securities, of New York, assistedCell Therapeutics in managing the offering.
James Bianco, president and CEO of Cell Therapeutics (CTI), saideven his company had a tough go of it in the current financialsituation. "It's a very difficult environment," he said. "Probably aslow as it can go. It's was difficult even getting [an audience withinvestors]. There is that much reluctance to even spend 30 minutes oftime speaking with you.
"The degree of sophistication for buyers is considerably higher [thanin 1992]," Bianco said, meaning investors now get deeper inside thescience and assess commercial opportunities."
Since CTI has delivered on the promises it gave to investors inprevious financings, however, the company continues to be able toattract investors," Bianco said.
"If you look at the company historically," Bianco told BioWorld, "ithas made various projections about its programs and technology andhow it will utilize its resources. We've managed to stay focused, addvalue to the technology and we continue to add value to the clinicalprograms. Each time we go back to the market the story continues tobe a strong one."
The lead institutional investor in the offering was London-basedInternational Biotechnology Trust plc, which is managed byRothschild Asset Management. Other investors included MorningsideVentures, of Newton, Mass.; Schroder Ventures, of New York;Phoenix Partners, of Seattle; New York Life; Vector Later-StageEquity Fund L.P., of Deerfield, Ill.; and Vulcan Ventures Inc., ofSeattle.
CTI's lead product candidate is Lisofylline (CT-1501R), a smallmolecule compound being tested in recently initiated Phase II/IIIstudies for reduction of toxicities associated with radiation andchemotherapy in cancer patients.
Trials include two populations of patients. One is looking at the agentin bone marrow recipients, the other in patients with newly diagnosedleukemia. Both are investigating the ability of Lisofylline to reducetoxicities associated with the anti-cancer treatments, and its ability toaccelerate regeneration of red and white blood cells and platelets.
Bianco said patient accrual should be completed by the end of theyear. Up to 175 patients are expected to be enrolled.
A Phase II/III trial of the compound has been approved forprevention of lung injury following multiple traumatic injuries. Butthat trial, outside of CTI's oncology and immunology focus, won'tget under way until a corporate partner is secured, Bianco said.
Another compound, CT-2584, has shown anti-tumor activity inhuman and rodent cell lines without being toxic to normal cells.Phase I trials are expected to get under way in the U.K. in the secondhalf of the year. Potential indications are for refractory breast, colon,prostate and lung cancers.
A preclinical compound, CT-2576, showed evidence of suppressingcytokine-induced and tat-directed expression and replication of HIVin cells. A mechanism of action involves interfering with a specificspecies of cell membrane phospholipid, called phosphatidic acid.
"We are in mid- to late-stage discussions with several pharmaceuticalcompanies that are assessing the opportunities of Lisofylline and/or2584," Bianco said. "We've added a lot of value to both products sowe'd like to recoup some of that value," which could entail sharingon more than a royalty basis in the U.S.
BioChem Pharma Inc., of Laval, Quebec, is CTI's marketing partnerfor Lisofylline in Canada. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.