EntreMed Sweetens Private Placement With China Rights to Cancer Drug

Sep.12.10 | About: EntreMed, Inc. (ENMD)

EntreMed (NSDQ: ENMD) raised $5.1 million in a private placement that featured an unusual sweetener for the investors: a 16-month option on the China marketing rights to EntreMed’s lead drug candidate. The funding placed 1,886,662 units at a price of $2.70 (EntreMed closed at $3.00), each unit consisting of 1 share of stock and a three-year warrant for .2 share – the upshot being that outside of the marketing option, the transaction was structured as a normal private placement.

The leader of the investor group, Tak W. Mak, Ph.D., is a scientific advisor to EntreMed and a co-founder of Miikana Therapeutics, Inc. which EntreMed acquired in 2006. Miikana discovered EntreMed’s lead drug candidate, ENMD-2076.

According to the press release, the investor group, Selected Value Therapeutics I, LLC, includes oncology experts and people who have experience in China drug development.

ENMD-2076 is an orally-active, Aurora A/angiogenic kinase inhibitor that has shown activity against Aurora A and multiple tyrosine kinases linked to cancer and inflammatory diseases. The drug is thought to work through multiple mechanisms, including antiproliferative activity and the inhibition of angiogenesis. In the lab, it has shown activity against both solid tumors and hematological cancers. Earlier this year, it was granted orphan drug designation by the FDA for acute myeloid leukemia (AML).

Prior to the funding, EntreMed had $8 million of cash on hand. It said the funding would give it room to operate through 2011.

Disclosure: none.