EpiCept expects to receive approximately $1.9 million in net proceeds from a registered direct offering. Net proceeds will be used to meet working capital needs while the company seeks to close the key element of its previously announced financing plan and for general corporate purposes.
The money obtained through this offering together with existing cash should be sufficient to fund expenditures into the first quarter of 2011, according to EpiCept. On November 5, the firm said that it planned to enter a nonequity financing transaction, which, if completed, would support operations through at least the end of 2011.
EpiCept anticipates closing such an agreement before year end, but should the transaction not close or the proceeds be less than anticipated, the company may seek additional or alternative sources or types of financing.
Today’s registered direct offering is expected to close on or about November 10. The agreements cover the purchase of approximately 3.3 million shares of its common stock at $0.61 per share and five-year warrants to buy up to approximately 1.3 million shares of common stock at an exercise price of $0.56 per share, exercisable immediately.
EpiCept is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. It has one product on the market, Ceplene®, which was granted full marketing authorization by the European Commission last year for the remission maintenance and prevention of relapse in adult patients with acute myeloid leukemia (AML) in first remission.
Partner Meda launched marketing activities during the second quarter of 2010 in the U.K., Germany, and Austria. Ceplene is expected to be rolled out to other EU countries over the next 12 months. Applications for product reimbursement have been submitted and are yet to be approved by the remaining big five European countries of France, Italy, and Spain before a formal commercial launch can occur. These approvals are expected to be received before the end of the year.
On August 23, the firm received a refuse to file letter from the FDA regarding the Ceplene NDA, which was submitted in June. The agency said that the application did not establish Ceplene's therapeutic contribution in its combination with IL-2. It recommended that an additional confirmatory trial assessing Ceplene's contribution and using overall survival as a primary endpoint be conducted.
On October 28, EpiCept reported that it reached an agreement with the FDA on issues raised in the refuse to file letter. The company will conduct a two-arm, randomized, open-label trial that will compare the efficacy of Ceplene plus low-dose IL-2 to standard of care with overall patient survival as the primary endpoint. The company's previous Phase III trial demonstrated a statistically significant prolongation of leukemia-free survival, the primary endpoint, and extended overall survival by more than one year in patients in their first complete remission.
As a next step, EpiCept will submit a detailed Phase III protocol. The firm also recently filed an application with the FDA to gain fast track status for Ceplene. In addition to other benefits, if granted, this should permit an expedited review of the Ceplene NDA once filed.
The company has two more oncology candidates in its clinical pipeline. Both were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. Azixa is in a Phase II brain cancer trial, and Crolibulin is being tested against solid tumors in Phase I.
EpiCept’s pain pipeline includes EpiCept™ NP-1, a prescription topical analgesic cream. It is designed to provide effective long-term relief of pain associated with peripheral neuropathies. The treatment is in Phase II trials to relieve pain associated with neuralgia due to diabetes, chemotherapy, or shingles in adults.