Cytokinetics Inc. secured the option to access up to $75 million over the next three years through a committed equity financing facility with Kingsbridge Capital Ltd.

The deal provides Cytokinetics with a "safety net," Sharon Surrey-Barbari, the South San Francisco-based company's senior vice president and chief financial officer, told BioWorld Today.

"I don't look at it as a primary source of capital," Surrey-Barbari said. Instead, she views the money as a "strategic instrument" that could be accessed if the company needs cash ahead of releasing key data that could drive a larger financing effort. But for now, the company is not short on cash; it reported $161.6 million in its coffers as of June 30.

That money is being used to drive clinical trials with Cytokinetics' pipeline of small molecules for cancer and cardiovascular disease.

Ispinesib (SB-715992), a kinesin spindle protein (KSP) inhibitor, is finishing up a slew of Phase I and Phase II trials, with Phase I studies still ongoing in pediatric cancers, hematological cancers and in combination with capecitabine for multiple tumors.

Cytokinetics plans to start a Phase I/II trial in breast cancer later this year, and GlaxoSmithKline plc holds an option to take over the compound for Phase III.

Cytokinetics' own KSP inhibitor, SB-743921, is in a Phase I/II trial in non-Hodgkin's lymphoma, while GSK just started a Phase I cancer trial with the CENP-E inhibitor GSK-923295. Cytokinetics also is conducting a Phase IIa trial in stable heart failure with the cardiac myosin activator CK-1827452, which Amgen Inc. has the option to license based on Phase IIa data.

The Kingsbridge financing facility mirrors a deal the two parties struck in 2005. Cytokinetics used that deal to access $32 million over the past two years. (See BioWorld Today, Nov. 1, 2005.)

As in the previous arrangement, the new deal provides access to the funding through Kingsbridge's purchase of newly-issued shares of Cytokinetics' common stock. Funds can be accessed in tranches of up to $15 million or 2.5 percent of the company's market capitalization at the time of the drawdown. Each tranche would be issued and priced over an eight-day period, and Kingsbridge would purchase the shares at discounts ranging from 6 percent to 10 percent, depending on the average market price during the pricing period. Cytokinetics is not obligated to access the funds.

In connection with the financing, Cytokinetics issued Kingsbridge three-year warrants to purchase up to 230,000 shares of common stock at $7.99 per share, a 130 percent premium over the average of recent closing prices.

Shares of Cytokinetics (NASDAQ:CYTK) fell 24 cents to close at $5.76 on Tuesday.

Aastrom Raises $13.5M For Regenerative Products

With a Phase III trial under way using regenerative stem cell products to treat osteonecrosis of the femoral head, Aastrom Biosciences Inc. entered agreements to raise $13.5 million through a registered direct offering of stock and warrants.

The Ann Arbor, Mich.-based company said it will sell approximately 11.8 million units at a price of $1.14 per unit. Each unit will consist of one share of common stock and one five-year warrant to purchase an additional half-share of common stock for $1.5875 per share. If all warrants are exercised, Aastrom stands to get another $9.4 million.

Aastrom's shares (NASDAQ:ASTM) fell 17 cents, or 13.4 percent, to close at $1.10 on Tuesday.

The funds raised will supplement the $28.3 million in cash, equivalents and short-term investments Aastrom reported as of June 30, the end of its 2007 fiscal year. At the time, the company had projected a burn rate of $1.7 million per month in the coming year. At that rate, the combination of existing cash and new money should give the company about a two-year runway.

In its prospectus, Aastrom said proceeds from the offering will be used for clinical trials, research and development, manufacturing, working capital and general corporate purposes, including the possible acquisition or development of complementary business activities.

Clinical trials alone are keeping the company fairly busy. In addition to the ongoing Phase III trial in osteonecrosis of the femoral head, Aastrom is conducting an open-label study in Spain for the same indication. Positive data from both trials could be used to support a biologics license application for Aastrom's Bone Repair Cell (BRC) product, a mixture of stem and progenitor cells derived from a patient's own bone marrow.

Aastrom also expects data this month from a Phase I/II fracture trial and is conducting a Phase IIb trial in critical limb ischemia. Preclinical programs also are under way for cardiac regeneration in chronic heart disease and neural regeneration in spinal cord injury.

BMO Capital Markets Corp. served as the placement agent for the offering, which is expected to close in the next few days.

In other financing news:

• Linkage Biosciences Inc., of San Francisco, completed a seed financing round that brings the company's total funds raised to $1 million. Greenhouse Capital Partners LP led the financing. Proceeds will be used to develop a line of diagnostic products for organ and stem cell transplantation.

• OncoMethylome Sciences SA, of Liege, Belgium, raised €10.6 million (US$15 million) in a private placement of 1.06 million shares priced at €10 per share. Piper Jaffray Ltd., Kempen & Co. and ING Belgium served as placement agents. The company said proceeds will be used to support product development and clinical trials of its gene methylation cancer diagnostics.