Cancer drug developer Oncothyreon has priced an underwritten public offering of 10,000,000 shares of its common stock at a price to the public of $4.00 per share for gross proceeds of $40.0 million. The net proceeds from the sale of the shares will be approximately $37.4 million.
Oncothyreon has also granted the underwriters a 30-day option to purchase up to an additional 15% of the shares of common stock offered in the public offering to cover over-allotments. This would result in additional gross proceeds of approximately $6.0 million if exercised in full.
Oncothyreon currently intends to use the money to fund development of two candidates: small molecule PX-866, which is being studied in multiple indications, and ONT-10, a follow-on to non-small-cell lung cancer (NSCLC) vaccine Stimuvax.
PX-866 is a PI3 pan-isoform irreversible kinase inhibitor. It is being studied in Phase II along with docetaxel as a treatment for head and neck cancer as well as NSCLC. It is also in Phase II trials as part of a combination regime with cetuximab to treat head and neck as well as colorectal cancers. Two more Phase II studies are determining the drug’s potential as a monotherapy for chemo-naïve prostate cancer patients and glioblastoma. Preclinical investigations in idiopathic pulmonary fibrosis are also ongoing.
ONT-10, on the other hand, is in IND-enabling studies. Oncothyreon has said that it expects to file an IND application in the third quarter and to begin a Phase I clinical trial by late 2011.
The vaccine is designed to direct an individual's immune system to identify and destroy cancer cells. It is designed to produce both an antibody and a T-cell immune response to cancer cells that express the MUC-1 target. It is a liposomal formulated vaccine composed of a 43-amino-acid glyocoprotein sequence of the tumor-associated antigen MUC-1 and Oncothyreon’s synthetic adjuvant PET-Lipid A.
ONT-10 is the company’s second cancer vaccine and is a follow-on to lead candidate Stimuvax. The vaccine incorporates a 25-amino-acid sequence of the tumor-associated marker MUC-1 in a liposomal formulation.
Partner Merck KGaA is currently evaluating the vaccine in a Phase III NSCLC trial. Last year FDA placed a full clinical hold on Stimuvax in March because of a suspected treatment-related case of encephalitis in a patient involved in an exploratory Phase II trial of the vaccine for multiple myeloma.
In June the hold was partially lifted, allowing worldwide clinical development in NSCLC to resume once local authorities gave the okay. A breast cancer Phase III trial remains on FDA clinical hold, though.