Bioenvision Inc. completed a private placement, raising $17.75 million to be used for clinical trials of its lead cancer therapeutics, clofarabine and Modrenal.

New York-based Bioenvision sold shares at $1.50 each, in addition to warrants exercisable at $2.50 apiece. The company has about 28 million shares outstanding. If the warrants are exercised, it would bring the outstanding shares to about 40 million, President and CEO Chris Wood said.

Bioenvision's stock (OTCBB:BIOV) fell 23 cents Tuesday to close at $3.10.

Wood said Bioenvision had been trying to "get the story out" about the company for some time, but it was not until it had Phase I results that investors decided to hand over their money.

"Investors liked the story, but were understandably cautious," Wood said.

The money, expected to last about two years, gives Bioenvision the necessary funds to conduct clinical trials of both drugs.

"Also, we have several milestone payments due in the next two years," Wood said. "We also expect royalty checks coming in with deals with Edwards Life Sciences."

Edwards Life Sciences is selling products using Bioenvision's Oligon anti-infective technology, which is a biomaterial that has been approved for certain indications in the United States.

Clofarabine is a nucleoside analogue that is being co-developed with Bioenvision partner Ilex Oncology Inc., of San Antonio. Clofarabine is in Phase II trials in the United States, which are being conducted by Ilex in both pediatric and adult populations, and in Europe, conducted by Bioenvision.

"We have orphan drug designation in Europe and the United States for acute leukemias," Wood said.

Ilex also has five centers in the UK as part of its U.S. trials., and the companies will share information.

"We are working in tandem to get rapid recruitment," Wood said.

Modrenal already is approved in the UK for the treatment of post-menopausal breast cancer, and Wood said Bioenvision will be working over the next 12 months to get that to the market. Already, it has begun physician education programs. It also already has sales of the product for veterinary uses.

"We will be discussing with the FDA within the next two months a strategy for commencing trials in the United States," Wood said.

The company did have an investigational new drug application approved for Modrenal for trials in breast cancer, and the company plans to reactivate that, he said. In addition, Bioenvision wants to expand the IND for prostate cancer trials.

"The money we've raised will allow us to do that," he said.