Australian biotechnology company Avexa Ltd. parlayed positive Phase IIb data on its lead HIV compound into a funding round that will total A$75 million (US$60.1 million).

The Melbourne-based company, which was down to about A$5 million in the bank, now has funds expected to take it all or most of the way through Phase III trials of the HIV compound. Investors, too, should be feeling pretty good about the deal.

The financing consisted of an A$15 million private placement with U.S. investors and a fully underwritten A$60 million rights issue available to existing shareholders. Stock is being sold in each case at A$0.53 per share, a 16 percent discount to a 10-day average ending March 14. The stock (ASX:AVX) gained A$0.29 Wednesday, or 42.6 percent, to close at A$0.97 - a quick 83 percent bump from the A$0.53 price of new shares.

Trading on the stock had been on hold pending release Tuesday of results from a 47-patient Phase IIb trial of apricitabine, or ATC, a nucleoside reverse transcriptase inhibitor being developed for treating drug-resistant HIV. Patients who received ATC achieved on average a reduction of HIV in the blood of greater than 0.8 log10 (85 percent) after 21 days of treatment, compared to a reduction of less than 0.03 log10 in patients treated with 3TC (lamivudine, Epivir), an approved NRTI HIV drug from London-based GlaxoSmithKline plc.

"These outstanding results clearly position ATC to become the most effective and well tolerated NRTI for treatment of drug-resistant HIV," Jonathan Coates, Avexa's chief scientific officer and a co-inventor of 3TC, said following release of those data.

Company officials could not be reached for comment. But CEO Julian Chick said in a news release that a Phase III trial is expected to begin by the end of the year. The trial is expected to take about two years. Avexa said the financing also will support a trial testing ATC in children with HIV.

Amrad Corp., also of Melbourne, formed Avexa in 2004 through the spin-off of its anti-infectives portfolio into Avexa, and by providing initial funding. Avexa licensed rights to ATC - then known as SPD754 - outside North America from Basingstoke, UK-based Shire Pharmaceuticals Group plc in January 2005. Then two months ago, Avexa acquired North American rights from Shire, giving it worldwide rights. Shire got a $10 million up-front payment in the latter deal and 8 million additional Avexa shares, increasing its position in Avexa to about 8 percent. Shire remains entitled to milestones and royalty payments.

ATC, which Avexa also has called AVX754, is the company's only clinical-stage product. It has two other programs in research stages of development. In February 2006, Avexa got exclusive rights from MNLpharma Ltd., of Aberystwyth, UK, to a number of HIV integrase inhibitors. MNLpharma is entitled to undisclosed milestones and royalty payments.

A separate program at Avexa - VRI Antibiotics - is focused on development of compounds for treating vancomycin-resistant infections. The goal there is the design of compounds that actively bind to the modified cell wall in resistant bacteria as well as to the normal target, giving them activity against both vancomycin-sensitive and vancomycin-resistant bacteria.

Passport Management LLC USA, of San Francisco, was lead investor in the A$15 million U.S. portion of the A$75 million financing. Franklin Templeton Investments, of Rancho Cordova, Calif., also participated.

The other part of the deal entails a 2-for-5 rights issue available to existing shareholders. That deal was fully underwritten by ABN AMRO Morgans Corporate Ltd., of Brisbane, Australia.

In other financing news:

• CytRx Corp., of Los Angeles, said it has received about $10.6 million since the beginning of 2007 from the exercise of approximately 6.27 million warrants issued in prior equity financings and other transactions, and from the exercise of employee stock options. Including the warrants and options exercised, CytRx now has about 76.8 million shares outstanding. It had cash and cash equivalents of $33.7 million on Sept. 30. CytRx is developing small-molecule compounds based on its molecular chaperone co-induction technology.

• Numira Biosciences, of Irvine, Calif., said it secured $2.5 million in a Series A round of funding led by vSpring Capital, of Salt Lake City. The financing also included participation from the Tech Coast Angels and the Pasadena Angels, both angel investor groups based in Southern California. Numira is a tools company focused on leveraging advances in genetics and molecular imaging to create a number of products applicable in drug research, discovery and development.

• ViroPharma Inc., of Exton, Pa., priced $225 million of convertible senior notes due March 2017. The 2 percent notes initially will be convertible into stock at $18.87 per share, a 32.5 premium to Tuesday's closing price. Proceeds will be used for general corporate purposes, it said, including potential strategic investments or acquisitions of products, technologies or complementary businesses. No commitments have been made in those areas, ViroPharma said. Goldman, Sachs & Co. is the sole book-running manager for the offering, with Credit Suisse and Piper Jaffray & Co. serving as co-managers. The underwriters have an option to purchase up to $25 million more of the notes.

• Oncolytics Biotech Inc., of Calgary, Alberta, said Canaccord Capital Corp. fully exercised its overallotment option to purchase an additional 600,000 units in connection with an offering that closed in February, bringing in another C$1.8 million. Total proceeds from the offering were C$13.8 million (US$11.9 million). (See BioWorld Today, Feb. 23, 2007.)

• Neuro-Hitech Inc., of New York, closed a private placement of $5.6 million, which is expected to provide the company adequate funding for the next 12 months to 16 months. During that time, the firm anticipates completing the Phase II trial of Huperzine A in Alzheimer's disease. In connection with the placement, the company issued about 1.1 million shares of common stock and about 550,000 warrants. The final offering occurred March 15 and includes the $3.1 million previously announced.