Sonus Pharmaceuticals Inc. more than doubled its cash holdings after raising net proceeds of about $13.1 million through the private placement of 3.9 million common shares to new and current institutional investors.

Through June 30, the Bothell, Wash.-based company reported $11.3 million in cash and marketable securities. But it bolstered its coffers after pricing the shares at $3.56 apiece in the sale, which grossed $14.2 million before expenses. The per-share price equaled the stock's closing bid on July 25, when the definitive agreement closed.

New York-based Punk, Ziegel & Co. LP acted as the financing's placement agent.

For an additional 12.5 cents per underlying share, the investors also purchased 1.95 million five-year warrants with an exercise price of $4.09 apiece. Sonus reported 13.7 million shares outstanding through June 30.

The company's stock (NASDAQ:SNUS) gained 26 cents Tuesday to close at $3.97.

"We have reached a point with our lead product, Tocosol paclitaxel, where we are ready to push into the important pivotal phases of its clinical development," Sonus President and CEO Michael Martino told BioWorld Today. "This gives us the ability to accelerate that effort with confidence, independent of cash from a potential partner. But those discussions have been in progress."

He added an optimistic outlook for closing a partnership that reflects a positive valuation for the product, a reformulated version of the anticancer drug paclitaxel. The company said it is administered in a 15-minute infusion compared to three-hour infusions required with available paclitaxel products.

Sonus, which reported a three-month net loss of $3.1 million through June 30, said it expects to increase its burn rate to $1.2 million per month relative to Tocosol paclitaxel's continued development.

Before the end of the year, Martino said the company would begin several additional clinical trials of the product, including a 30-patient pharmacology study comparing it to Taxol, as well as Phase IIb studies in patients with inoperable metastatic bladder cancer, ovarian cancer and breast cancer. Each would enroll 40 to 50 patients.

At the American Association for Cancer Research meeting held earlier this month in Washington, the company reported data from three ongoing Phase II studies showing the product's favorable antitumor activity, including complete and partial responses, in cancer patients who have failed prior chemotherapeutic regimens. Tocosol paclitaxel also has demonstrated tolerability over multiple treatment cycles, Sonus said.

The studies, which concluded enrollment but continue with patient dosing, are evaluating the drug in treating ovarian, non-small-cell lung and bladder cancers.

"We would expect by our next quarterly conference call to be in a position to update the primary endpoint data for all patients in the trial - tumor response," Martino said. "By the end of the year or early next year, we would expect to be in a position to provide updates on the secondary endpoints, which include time-to-treatment-failure data and, potentially, survival data."

The company's Tocosol technology is designed to improve drug delivery through improved efficacy, fewer side effects and better convenience. Tocosol uses vitamin E to mix lipophilic, or oil-based, drugs with water to improve their intravenous delivery into the bloodstream. Beyond the paclitaxel product, it is developing other Tocosol-reformulated oncology drugs.

Martino said Sonus would advance a Tocosol formulation of camptothecin into clinical trials by the end of the year, should funding be available.

"This [financing] does not make room for that, but we would expect to complete a corporate partnership by the end of the year to secure development of Tocosol paclitaxel," Martino said. "We would expect that partnership to provide additional cash, putting us in a position to initiate Phase I trials on Tocosol camptothecin."

Four other Tocosol-based oncology products remain in earlier stages of research at Sonus, with plans to advance another toward Phase I trials by the end of next year.