AEterna Laboratories Inc. concluded private placements that initially grossed C$57 million (US$35.7 million) for the oncology-focused company, a financing that could increase to C$180 million over the next 20 months.
One private placement was with SGF Sante, a subsidiary of Societe generale de financement du Quebec, and Solidarity Fund QFL, of Montreal. The other was with Acqua Wellington Private Placement Fund Ltd., of New York.
“Most of the money will be used for our acquisition program,” said Gilles Gagnon, vice president and chief operating officer for AEterna, of Quebec City, Quebec.
In fact, C$35 million is slated for the acquisition of cancer-related technologies or companies.
“In order to fill the pipeline, we will acquire new compounds, new technology and/or companies,” Gagnon said. “Since we have decided to focus on cancer, we’re looking at some technology focused on angiogenesis with applications in cancer.”
In addition to angiogenesis-related compounds and technologies, AEterna also is looking at technologies including immunotherapies such as monoclonal antibodies and vaccines, he said.
“Of course, we will be opportunistic in acquiring any other leading technologies with applications in cancer,” Gagnon said.
About C$20 million will be dedicated to further development of Neovastat, AEterna’s naturally occurring compound derived from cartilage. It is in Phase III trials for renal cell carcinoma and non-small-cell lung cancer. Gagnon said that the company is nearing completion of the Phase III in renal cell carcinoma, having completed recruitment for the trial in December. Results of the study, which is taking place in America and Europe, are expected in early 2003.
Gagnon said AEterna is planning to file for registration in that indication in multiple countries in the second quarter of 2003.
Also, he said, AEterna still has to complete the Phase III trial in non-small-cell lung cancer comprising 760 patients and sponsored by the U.S. National Cancer Institute. It also is working on completing patient recruitment for a Phase II trial of Neovastat in multiple myeloma.
AEterna also will be focusing on a fourth indication for Neovastat.
“Last, but not least, we will be conducting work toward creating new drug candidates,” Gagnon said.
In the first private placement, AEterna issued to SGF Sante and Solidarity Fund QFL 7.3 million subordinate voting shares at a price of C$7.50 per share, as well as 7.3 million warrants. Half of those warrants are exercisable at C$13 per share, reflecting a premium of 73 percent. Those warrants will mature on March 31, 2003. The other half is exercisable at an initial price of C$20 per share, representing a premium of 167 percent. Those warrants will mature initially on Dec. 31, 2003. Following the placement, SGF Sante owns 11.2 percent of the company’s outstanding subordinate voting shares. If the warrants are exercised, it would own 20.2 percent. Solidarity Fund QFL owns 4,996,525 subordinate voting shares, which represents 14 percent of outstanding shares. If the fund exercises its warrants, it would hold 21.4 percent of the outstanding shares.
The private placement to Acqua Wellington involved AEterna issuing 266,667 subordinate voting shares at C$7.50 per share, in addition to 133,333 warrants exercisable at $13 per share, reflecting a premium of 73 percent. They mature on March 31, 2003.
If AEterna’s shares trade at more than C$20 for 20 consecutive days, the investors have 10 days to exercise all warrants.
AEterna’s stock on the Toronto Stock Exchange (AEL) closed Tuesday at C$7.80, down C30 cents. On Nasdaq (AELA) it fell 32 cents to close at $4.81.