ILEX Oncology Inc. gained gross proceeds of $93.5 million through the sale of 5.5 million common shares priced at $17 apiece.

The San Antonio-based company said it netted $87.5 million in the offering - funds it plans to use for product development, financing clinical trials and preclinical work.

"We want to continue to develop our compounds in different areas and various phases of testing," Mark Mellin, ILEX's chief financial officer, told BioWorld Today. "We also need to take a look at potential in-licensing opportunities and acquisitions of complementary products. It's a combination of those, and we figured it was the right time to do it."

The proposed sale was made public earlier this month. ILEX also said it would use a portion of the proceeds for working capital, expenditures and other general corporate purposes. A founding ILEX shareholder, the Cancer Therapy and Research Center Endowment sold another 500,000 shares for $8.5 million. (See BioWorld Today, July 22, 2003.)

The center, a nonprofit oncology institute, which originally spun out ILEX, began operations in 1994 and went public three years later. Over the years, the San Antonio-based Cancer Therapy and Research Center has sold blocks of shares and, following the latest offering, will own about 1.3 million shares of ILEX, or about 3.3 percent.

On Wednesday, the company's shares (NASDAQ:ILXO) dropped $1.30 to close at $17.

ILEX reported 32.7 million shares outstanding for the quarter ended June 30, along with $153.3 million in cash and marketable securities. It recorded an $8.8 million net loss in the same period, though its revenue grew to $10.1 million, in large part due to $23.3 million in global sales of the cancer drug Campath (alemtuzumab).

Already marketed to refractory chronic lymphocytic leukemia patients, ILEX said ongoing evaluations could lead to expanded indications for Campath down the road.

"A number of studies have been going on worldwide to bring that drug forward in the disease continuum into second- or first-line patients," Ann Stevens, ILEX's director of investor relations, told BioWorld Today. "That would expand the market within the CLL indication itself. But we also have Campath in a worldwide Phase II trial for multiple sclerosis, so there are many initiatives under way to expand the development of Campath."

ILEX's pipeline also includes eflornithine, a product being studied in a Phase III trial that just completed accrual of 450 patients with low-grade, superficial bladder cancer. A Phase II product, clofarabine, produced an overall 28 percent response rate in heavily pretreated children with acute leukemia in a trial that remains open and enrolling.

Those data were reported at last month's American Society of Clinical Oncology meeting, as were Phase I findings showing that another investigational compound, ILX-651, appears to be biologically active at tolerable doses in patients with advanced refractory solid tumors.

"Our priorities are going to be with those key products," Mellin said.

Its apomine product, which has been studied in melanoma and ovarian cancer, also is being developed outside oncology in women with low bone mass or osteoporosis.

"We've always had a diverse pipeline not focused on any one technology," Stevens said. "We've tried to reduce the risk by spreading into different technologies, mostly aimed at the treatment of cancer, but [similar to] many other companies, we're always looking at opportunities in the market for products or technologies that might complement our existing pipeline."

Both the company and the Cancer Therapy and Research Center granted underwriters a 30-day, 900,000-share overallotment option that could result in gross proceeds of another $15.3 million.

New York-based UBS Securities LLC is the offering's sole book running underwriter, with co-management from Lehman Brothers, CIBC World Markets Corp. and U.S. Bancorp Piper Jaffray Inc., all of New York.