The Immune Response Corp. raised about $12 million in gross proceeds after entering agreements to sell about 6 million common shares at $2.02 apiece to a number of unaffiliated institutional investors.
The per-share price reflected a 24 percent discount to Monday's closing bid of $2.67. On Tuesday, the stock (NASDAQ:IMNR) fell 27 cents, or 10.1 percent, to close at $2.40.
"This brought in some new institutional investors, which the company felt would help strengthen it," Gwen Rosenberg, the company's investor relations consultant, told BioWorld Today. "It also was relatively quick and brought in what we consider a substantial amount of money at this time."
She added that the formula for the price per share will be disclosed in the company's filing in connection with the offer.
Investors in the private placement also received five-year warrants to purchase about 3 million common shares at $3.32 apiece. New York-based Rodman & Renshaw Inc. served as the exclusive placement agent for the transaction, which was made to accredited investors.
Prior to the offering of the unregistered shares, the Carlsbad, Calif.-based company had about 32.3 million shares outstanding. The company posted a net loss of about $9.2 million in the second quarter. As of June 30, it reported about $1.5 million in cash, cash equivalents and short-term investments.
But Immune Response Corp. has worked to improve that figure.
Early last month, the company grossed about $3.2 million following the exercise of about 2.4 million Class A warrants, completing the first phase of its plan to strengthen its financial position. Since March, the company said it has received more than $13 million in cash, while reducing its debt by about $2.4 million. The plan's next phase involves the exercise of Class B warrants, which, if all were exercised, would gross about $17 million.
Immune Response said it would use the proceeds to fund ongoing activities related to Remune, an immune-based therapeutic vaccine in Phase II studies for HIV, as well as its program to develop an HIV vaccine candidate with therapeutic and prophylactic properties. The company has moved other programs to the back burner as it focuses on the two HIV therapeutic vaccines.
"The most recent Remune study was started in Italy on Sept. 29," Rosenberg said, noting that the trial is designed to evaluate the compound in HIV-infected patients who have not yet received antiretroviral drugs. "The goal is to get data from this patient population and then design a Phase III study."
A Spain-based Phase II study of Remune began in June to assess the drug's ability to maintain control of HIV in patients who have interrupted their antiretroviral therapy.
Immune Response Corp.'s next-generation HIV vaccine candidate is based in part on recently in-licensed adjuvant technology. Last week, the company reported an agreement to license Amplivax from Cambridge, Mass.-based Hybridon Inc.
Immune Response said the candidate, which has demonstrated activity in laboratory experiments, combines the whole-killed vaccine technology employed in Remune with Amplivax, the name given the second-generation immunomodulatory oligonucleotide when it is used as an adjuvant. Otherwise, Hybridon refers to it as HYB2055.
"We believe this new HIV vaccine could possibly have potential in areas in addition to where Remune is focused," Rosenberg said. "The company is focusing on those two programs intentionally to move them forward as quickly as possible."