Cyclacel Pharmaceuticals Inc. is completing its second financing since acquiring Xcyte Therapies Inc. less than a year ago, raising $36 million through the sale of stock and warrants at market price.

The Berkeley Heights, N.J.-based company reached agreements with institutional investors for a registered direct offering of units consisting of about 4.2 million shares and 1.1 million warrants. Units are being sold at about $8.47 each, which reflected the Feb. 12 closing bid price of $8.44 plus $0.125 for each full warrant. Warrants are exercisable at the same $8.44 price.

"We met all the milestones we promised investors in the PIPE" financing in April, which brought in $45.3 million, Spiro Rombotis, president and CEO of Cyclacel, told BioWorld Today. He pointed out that deal was done on better terms than the deal last year, which involved the sale of about 6.4 million units at $7.05 each.

"That reflects the company's progress," he said.

Cyclacel now has about $80 million in cash with a projected burn of $29 million for 2007, enough to fund development of its clinical-stage cancer compounds and the rest of its pipeline into 2009, Rombotis said.

Cyclacel's main focus is developing cell cycle-based, mechanism-targeted therapies to stop the growth of cancer cells. Its lead product, seliciclib (CYC202), is an orally available cyclin-dependent kinase inhibitor being studied in Phase IIb trials for non-small-cell lung cancer. Results from that trial are expected in late 2007. Also, a Phase II trial of seliciclib in nasopharyngeal cancers is expected to begin in the second half of this year.

The second program at Cyclacel is sapacitabine (CYC682), an orally available, cell cycle-modulating nucleoside analogue that is in Phase I trials in advanced leukemia and myelodysplastic syndromes. Data from that trial are expected to be presented at the American Society of Clinical Oncology meeting in June, while Phase II trials in one or more cancers are expected to begin this quarter, Rombotis said.

The third program is CYC116, an orally available Aurora kinase and VEGFR2 inhibitor, for which an investigational new drug application was filed in December. A Phase I trial in hematological cancers is expected to begin in the second quarter and a Phase I trial in solid tumors in the third quarter, Rombotis said.

The company has at least five other cancer programs and three noncancer programs in preclinical development, but now the focus is on the development-stage candidates, he said.

The programs all are unpartnered, except for negotiation options that Tokyo-based Daiichi Sankyo Co. Ltd. has on sapacitabine for the Japanese market. The strategy is to partner after Phase II trials, Rombotis said.

"It's fair to say there was interest in the entire portfolio of the company," he said, adding that investors appreciated that Cyclacel is a pure-play, cell-cycle biology company focused on cancer. "In cancer," he said, "people like that we have three different oral compounds that seem to work against sequential targets in the cell-cycle biology continuum."

Cyclacel, formerly a private company based in Dundee, Scotland, gained its American presence and stock listing through a reverse merger with Xcyte in March 2006. Xcyte had run into problems after failing to reach agreement with the FDA on Phase III trials of its Xcellerated T Cells in treating chronic lymphocytic lymphoma. Cyclacel gained 80 percent ownership of the merged company.

Lazard Capital Markets LLC served as lead placement agent for the financing, while Needham & Co. LLC and ThinkEquity Partners LLC were co-agents. Cyclacel has about 20.36 million shares outstanding following the deal.

Its stock (NASDAQ:CYCC) fell 40 cents Tuesday to close at $8.10.