EntreMed entered into a securities purchase agreement for gross proceeds of approximately $5.1 million, or net proceeds of roughly $4.7 million. The capital will fund operations through 2011 and be used to expand development of anticancer agent ENMD-2076, according to the firm. The drug, an aurora A/angiogenic kinase inhibitor, is currently in Phase II trials for ovarian cancer, and data is expected in early 2011.
Concurrent with the execution of the securities purchase agreement, EntreMed gave Selected Value Therapeutics (SVT) an option to exercise, on behalf of the investors, certain license, development, and commercialization rights for ENMD-2076 in China. If the option is exercised, EntreMed will be entitled to receive development milestone payments and royalties on future product sales within that country. The option is exercisable at any time until December 31, 2011.
"We worked with Selected Value Therapeutics to develop an innovative financing structure that accomplishes our financing goals with minimum dilution to our current investors," according to Michael M. Tarnow, executive chairman of EntreMed. "The financing extends our cash runway through 2011. We are on track to complete our current Phase II ovarian cancer study and based on the results from our Phase I studies, will move forward with our plans for expansion into additional clinical trials in other indications."
An aggregate of 1,886,662 shares of EntreMed's common stock and warrants to purchase an aggregate of 377,327 shares of its common stock will be issued under the securities purchase agreement. The shares of common stock and warrants were offered in units consisting of one share of common stock and 0.20 warrants to purchase one share of common stock at a price of $2.70 per unit to a group of accredited investors. The common stock purchase price represents the consolidated closing bid price of EntreMed's common stock on September 7. The warrants have a term of three years and an exercise price of $2.825.