LONDON Antisoma plc took steps to avoid its looming funding gap with a 4-for-3 rights issue to raise £22 million (US$31.3 million). The issue is priced at 20 pence per share, representing a 30 percent discount.

However, the stock fell more than 20 percent to 24.5 pence, wiping out most of the discount, when the news was disclosed Friday.

The company has been signaling for some time that it needed to raise money, but CEO Glyn Edwards has been holding out, hoping for an improvement in the markets, or to fill the hole with a licensing deal. He told a teleconference, “We’ve broadened the pipeline and got ourselves in a strong position, but the fundamental weakness that has held us back over the past six months was the cash position. With the rights issue we have fixed that.”

Along with £5.2 million cash in December 2001, Antisoma, based in London, now has sufficient funding for the next two years.

“If we assume no further income it will last to the end of 2003, but we expect to do at least one deal this year,” Edwards said.

The compound Edwards expects to partner is Therex, a treatment for breast cancer, which recently was granted a U.S. patent. “There is a great deal of interest in licensing this. We expect to do a deal in 2001, so getting the U.S. patent is an important value driver,” he said.

In the Phase I study of Therex in 18 patients, the product was safe and well tolerated. Antisoma has secured GMP product for further trials and expects to start Phase II later this year.

Overall, Edwards said that £9 million will be used to progress the clinical development of the company’s four lead products, and to move two more candidates into the clinic in 2001. Another £7 million will be spent on further preclinical development of the other three compounds in the portfolio, and to secure GMP product for clinical trials, while the remaining £6 million will be used for general purposes.

Antisoma focuses on in-licensing preclinical products from cancer research organizations worldwide, and developing them before outlicensing. The company has nine products in its portfolio.

Most of the £9 million for clinical development will be devoted to the lead product, pemtumomab, which is licensed to Abbott Laboratories. At the beginning of this year Antisoma took back certain rights and, as a result, will be pumping in an extra £7 million in development costs over the next three years.

Pemtumomab, a yttrium-90 radiolabeled antibody, was expected to receive approval this year. However, in June 2001 the FDA told Antisoma to increase the number of patients in the Phase III trial in ovarian cancer, extending it by 18 to 24 months.

Edwards said he now expects the trial to hit the target of 420 recruits in October. The study will be unblinded after 116 deaths, expected to occur by October 2004. Recruitment in a Phase II trial of pemtumomab in gastric cancer is now complete, and the first safety and efficacy data are expected in mid-2002.

Abbott, which owns 7 percent of Antisoma, is not subscribing to the rights issue. However, Edwards said he was particularly pleased that the charity Cancer Research UK, the source of several of Antisoma’s products, is investing £1 million.