Taking advantage of a rising stock price during a week of good news, Cell Genesys Inc. is padding its coffers by selling 10.8 million shares for gross proceeds of $60 million.

Shares are priced at $5.55 each, and the sale includes 2.2 million warrants for buying additional shares.

The South San Francisco-based firm could not be reached for comment, but said in its prospectus that it anticipates net proceeds of about $55.2 million, which will be used to support ongoing product development, including the ongoing late-stage trials of its lead candidate, GVAX, as well as for general corporate purposes.

Shares of Cell Genesys began climbing March 30, a day after an FDA advisory panel issued its first positive recommendation for a cancer vaccine. That product, Provenge (sipuleucel T), by Seattle-based Dendreon Corp., is pending approval in prostate cancer, but the panel's decision gave a lift to other immunotherapy products, such as Cell Genesys's GVAX, which is in Phase III studies in prostate cancer. (See BioWorld Today, April 2, 2007.)

The company's stock jumped 30 percent a few days later on final data from a Phase II trial of GVAX, demonstrating a median survival of 35 months in 22 patients who received a dosage of the product comparable to the one used in the ongoing pivotal program. That news pushed the company's stock (NASDAQ:CEGE) up $1.39 last week to close at $5.70.

Shares fell about 10 percent Wednesday on news of the stock offering, dropping 60 cents to close at $5.48.

The financing strengthens Cell Genesys' financial position - the company ended 2006 with $154 million in the bank and secured a $75 million committed equity financing facility in February - as it moves through the final development stages of GVAX in prostate cancer and advances the product in other cancer indications. GVAX, a cancer immunotherapy designed to stimulate a patient's immune system, is comprised of tumor cells that have been modified genetically to secrete the immune-stimulating cytokine granulocyte-macrophage colony-stimulating factor (GM-CSF) and are irradiated for safety.

In 2004, the company began its first Phase III study of GVAX immunotherapy in prostate cancer aimed at comparing GVAX to Taxotere (docetaxel, Sanofi-Aventis Group) chemotherapy administered with prednisone, with survival as the primary endpoint. The second pivotal trial, started in July 2005, is designed to evaluate Cell Genesys' product in combination with Taxotere vs. Taxotere plus prednisone, again measuring survival as the primary endpoint. Both trials are being conducted under a special protocol assessment and are expected to enroll about 600 patients each.

GVAX immunotherapy was granted fast-track status in prostate cancer, which would expedite the FDA's review of a biologics license application pending positive Phase III results.

Beyond prostate cancer, the company has ongoing Phase II studies of GVAX in pancreatic cancer and leukemia. Earlier this year, it reported preliminary Phase I data of GVAX in combination with ipilimumab, a fully human anti-CTLA-4 antibody from Princeton, N.J.-based Medarex Inc., in prostate cancer patients. Data showed that antitumor activity was seen in five of six patients receiving the combination therapy, including greater than 50 percent reductions in prostate-specific antigen levels. The ongoing trial is expected to enroll 25 to 30 patients.

Cell Genesys holds all rights to its GVAX program, and the company intends to seek partnering opportunities with co-promotion options in the U.S.

A second program in its pipeline already has gained a partner. In 2003, the company signed Basel, Switzerland-based Novartis AG in a global alliance to develop an oncolytics virus therapies program, which aims at using an adenovirus to create a cancer-killing virus. The companies are in a Phase I trial of CG0070 in recurrent bladder cancer, and are evaluating several preclinical candidates in multiple cancer types.

Cell Genesys has not yet reported its first quarter earnings, but the company showed a net loss of $30.3 million, or 54 cents per share, for the last three months of 2006. As of Dec. 31, it had 57.9 million shares outstanding.

New York-based Credit Suisse Securities LLC acted as the lead placement agent for the financing, while Needham & Co. LLC and Cantor Fitzgerald & Co., both of New York, and Canaccord Adams Inc., of Boston, served as co-placement agents.

In other financings news:

• Bionas GmbH, of Rostock, Germany, closed a €2.1 million (US$2.8 million) financing deal to fund sales, marketing and product expansion. Bionas focuses on profiling the metabolic activity of cells in vitro and offers the Bionas 2500 analyzing system that can be used to analyze signal transduction pathways, allowing target validation studies early in the drug discovery process. Genius Venture Capital GmbH and the KfW-Bankengruppe participated in the financing. Bionas also reported that Germany's Federal Ministry of Education and Research and the Federal State of Mecklenburg-Vorpommern (Ministry of Economics) granted subsidies of undisclosed amounts for two development projects.

• DNAPrint Genomics Inc., of Sarasota, Fla., said it will file a registration statement with the SEC to register 150 million shares to be issued under an investment agreement with Dutchess Private Equities Fund Ltd. The agreement provides that, from time to time, DNAPrint might deliver a notice to Dutchess, which will purchase DNAPrint shares upon the parameters of the deal. The company, which develops genomic-based products in the biomedical and forensics market, said it is raising additional funds to support research and development activities of its subsidiary, DNAPrint Pharmaceuticals Inc.

• La Jolla Pharmaceutical Co., of San Diego, said underwriters of its recent public offering exercised in full their overallotment option to purchase an additional 870,000 shares of common stock at the initial offering price of $6 each. Proceeds from the overallotment, plus proceeds from the 5.8 million shares sold in the offering, are expected to net about $38 million for the company to support ongoing trials of Riquent (abetimus sodium) in lupus renal disease and for general corporate purposes. Needham & Co. LLC acted as the sole lead book-running manager, while A.G. Edwards & Sons Inc. served as co-manager. (See BioWorld Today, April 7, 2007.)