Novelos has taken over Cellectar in a stock-for-stock transaction. The company, which saw its lead candidate fail in Phase III early last year, hopes the acquisition will bolster its cancer-focused pipeline. Immediately following the acquisition, Novelos completed a financing for $5,134,903. The money is expected to provide the new entity with capital into the fourth quarter.
As per the purchase deal, Cellectar shareholders received shares of Novelos common stock constituting approximately 85% of its outstanding shares post-acquisition, or 17,001,638 shares of Novelos common stock, after giving effect to a 1 for 153 reverse stock split effected by Novelos.
Under the financing arrangement, the company sold units consisting of an aggregate of 6,846,537 shares of its common stock and warrants to purchase an aggregate of 6,846,537 shares of its common stock. Each unit consists of one share of common stock at $0.75 per share and a warrant to purchase one share of common stock. The warrants have an exercise price of $0.75 per share and expire in March 2016.
Cellectar has three cancer-related compounds in development: COLD, expected to enter clinical trials late in 2012; HOT, expected to enter a Phase Ib dose-escalation trial in the third quarter of this year and Phase II trials in mid-2012 in monotherapy for solid tumors with significant unmet medical need; and LIGHT, an imaging agent that will likely begin in Phase I/II trials during the middle of this year.
CLR1401, or COLD, inhibits the phosphatidylinositol 3-kinase (PI3K)/Akt survival pathway, which is overexpressed in many types of cancer. As a result, COLD induces caspase-mediated apoptosis and inhibits cell proliferation in cancer cells. 131I-CLR1404, or HOT, is a radiopharmaceutical composed of a small quantity of COLD, acting as a cancer-targeted delivery and retention vehicle, and a cytotoxic dose of radiotherapy. 124I-CLR1404, or LIGHT, comprises a small quantity of COLD incorporating 124I, a PET imaging isotope.
“We expect this initial financing to provide us with capital into the fourth quarter, during which time we expect clinical progress with LIGHT and HOT and to begin work on an IND for COLD,” says Harry Palmin, president and CEO of Novelos.
Novelos’ original pipeline consists of NOV-205 in Phase Ib for chronic hepatitis C nonresponders and mid-stage trials with NOV-002 in breast cancer, chemotherapy-resistant ovarian cancer, and hepatitis C.
NOV-002 was discontinued from non-small-cell lung cancer Phase III trials in March 2010. Adding NOV-002 to paclitaxel and carboplatin chemotherapy was not found to be statistically or meaningfully different in terms of efficacy-related endpoints or recovery from chemotherapy toxicity versus chemotherapy alone.