A private investment group has agreed to invest $4.5 million inSomatix Therapy Corp. (NASDAQ:SOMA) to support development ofthe company's GVAX vaccine technology for the treatment ofcolorectal cancer.The deal consists of an immediate cash payment of $500,000,combined with the purchase of $1.5 million shares at a per-share priceof $6.50, according to Mark Bagnall, vice president and chief financialofficer of the Alameda, Calif. company. Somatix will receive amilestone payment of $1.25 million when an investigational new drugapplication (IND) is filed, and the investor group will then buy anadditional $1.25 million shares of Somatix at a price per share that hasnot yet been determined.In December 1993, Somatix raised $11.7 million in a PIPE (privateinvestment, public entity) through the sale of 2 million shares to agroup of institutional and individual investors at a 10 percent discount.Bagnall said those investors were not involved in the latest deal.Bagnall said Somatix hopes to file an IND for a Phase I trial of GVAXin the treatment of colorectal cancer within the next six to 12 months. Italready has a Phase I trial underway at the Johns Hopkins OncologyCenter in Baltimore of GVAX as a treatment for advanced kidneycancer. That trial, which began in December 1993, has enrolled half the24 patients required. Bagnall said Somatix hopes to have a trial ofGVAX in melanoma under way within three months, and to begin aPhase I trial of GVAX as a treatment for prostate cancer around thetime the colorectal trial is launched.Somatix's GVAX vaccine technology involves removing the patient'stumor, extracting tumor cells, and genetically modifying them tocontain the gene for granulocyte macrophage-colony stimulatingfactor. The modified cells are irradiated to prevent further division andthen injected back into the patient's body to stimulate an immuneresponse against cancer cells.Bagnall said GVAX vaccine is intended for use after a primary tumorhas been excised to prevent recurrences of the cancer. "Often it is notthe primary cancer that kills. What kills are the sometimes invisiblemetastases that occur later. GVAX is designed to create long-lastingimmune response against these types of cancer," Bagnall said. -Philippa Maister
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