Hybridon Inc. raised $5.1 million through a stock and warrant sale and simultaneously promoted one of its existing officers to the CEO post.

Sudhir Agrawal was tapped to lead the Cambridge, Mass.-based company following the resignation of Stephen Seiler, who left to pursue other business interests. That opened the door for Agrawal, who had been Hybridon's president and chief scientific officer. He has served in various capacities at the company since January 1993, and will remain its chief scientific officer in addition to taking on more financial responsibilities.

"When we founded Hybridon, it was based on antisense technology," Agrawal told BioWorld Today. "And in the last few years, in addition to antisense technology, we have added new technology for immune modulation. We are on a path to move the technology, which we are doing internally for cancer, and continue to expand the scope of it in other disease indications."

In the financing, which included institutional and overseas investors, the company sold about 8.8 million common shares at 58 cents apiece as well as warrants to purchase another 1.8 million shares at an exercise price of 67 cents. Hybridon's two largest stockholders, Great Point Partners LLP in Greenwich, Conn., and Optima Life Sciences Ltd. in the Isle of Man, UK, purchased a majority of the securities.

"We were delighted to get this funding," Robert Andersen, Hybridon's chief financial officer and vice president of operations, told BioWorld Today. He said the company was able to get the money above market, and with "demonstrated support from our largest shareholders."

Prior to the private placement, the company had about $16.3 million in cash, cash equivalents and short-term securities as of June 30, as well as nearly 100 million shares outstanding. Also through that date, it had 13.3 million warrants outstanding with a weighted average strike price of 97 cents. Hybridon recorded a $3.2 million net loss in the preceding three-month period.

The company plans to use its newly raised funds to accelerate the clinical development of IMOxine, which is scheduled to enter Phase II cancer trials in solid tumors early next quarter. The second-generation immunomodulatory oligonucleotide (IMO) drug candidate also is called HYB2055. In May, the company reported Phase I results showing that IMOxine was safe and produced immunological activity in patients with advanced metastatic solid tumors.

"We're moving quickly into this IMO area," Andersen said, "and we needed to accelerate the clinical trial process."

IMOxine stems from one of two technology platforms through which Hybridon has been focused on developing therapeutics. Its synthetic IMO motifs act to modulate responses of the immune system. Preclinical IMO programs are focused on asthma and infectious disease. The HYB2055 product also is the subject of a partnership with The Immune Response Corp., of Carlsbad, Calif., in which it is called Amplivax and used as an adjuvant for HIV.

Hybridon's antisense technology, which uses synthetic DNA to block the production of disease-causing proteins at the cellular level, has produced a second-generation antisense oligonucleotide called GEM231. Targeted to protein kinase A, it has been in Phase I trials in combination with irinotecan.

"By the end of the year," Agrawal said, "we hope to complete the ongoing Phase I trial, which is a combination of GEM231 and Camptosar."

Partnered antisense programs include a clinical stage oncology compound being developed by Aegera Therapeutics Inc. in Montreal, and research in human papillomavirus with Micrologix Biotech Inc. in Vancouver, British Columbia.

Hybridon recently out-licensed a series of patents and patent applications that protect targets to vascular endothelial growth factor for ocular indications with RNA interference molecules. Alnylam Pharmaceuticals Inc., also of Cambridge, in-licensed the intellectual property to bolster its RNAi portfolio. (See BioWorld Today, Aug. 5, 2004.)

In other business news, Hybridon promoted Timothy Sullivan to the newly created position of vice president of development programs. Previously the senior director of preclinical development, he will report to Agrawal. Seiler, the outgoing CEO, also resigned as a director of the company, but agreed to assist during the transition.

On Monday, Hybridon's stock (AMEX:HBY) dropped 5 cents to close at 48 cents.