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YM Funding Gets Up To C$23M For Tesmilifene Phase III Trials


Posted on: 09/16/2004

YM Funding Gets Up To C$23M For Tesmilifene Phase III Trials

By Karen Pihl-Carey

Staff Writer

As its Phase III tesmilifene trial continues to enroll breast cancer patients, YM BioSciences Inc. entered a bought-deal agreement that could result in gross proceeds for the company of C$23 million (US$17.8 million).

"What this does is it provides us with sufficient cash to complete our Phase III trials," said David Allan, YM's chairman and CEO. "And it also probably provides us the ability to expand the clinical trials using our two lead products."

YM's most advanced product, tesmilifene, is in a Phase III trial for metastatic and recurrent breast cancer, while its other lead, TheraCIM hR3, is expected to enter a pivotal Phase II/III trial in glioma by the end of the year.

Mississauga, Ontario-based YM agreed with a syndicate of underwriters to sell them 4.3 million units that will then be sold to the public for C$3.15 per unit, bringing the company C$13.5 million gross. Each unit consists of a common share of YM and one-half of a warrant. Each whole warrant is exercisable to acquire an additional common share of YM at C$3.75 per share for 36 months following the date of closing.

Underwriters are being led by Toronto-based Dundee Securities Corp., and include Vancouver, British Columbia-based Canaccord Capital Corp.; Toronto-based Sprott Securities Inc.; Montreal-based Dlouhy Merchant Group; and Vancouver-based Haywood Securities. They have an option to purchase up to about 2 million additional units until two days before closing, which could result in about C$6.5 million. For 60 days after closing, they have an option to purchase up to an additional 15 percent of the issue to cover overallotments. If both the option for additional units and the overallotment option are fully exercised, the company would raise C$23 million gross.

Allan told BioWorld Today the funds could take the company through the completion of the tesmilifene trial in 2006 and a new drug application filing, if the survival primary endpoint reaches statistical significance at the interim stopping point of 192 events (deaths). A chemopotentiator licensed from the University of Manitoba, tesmilifene helps existing chemotherapies be more effective. About 35 percent of breast cancer patients have metastatic and recurrent breast cancer. With about 200,000 cases of breast cancer diagnosed each year, about 70,000 fall into the category tesmilifene is being tested against in the Phase III trial. About a third of those patients are treated with Herceptin (Genentech Inc.), while the other two-thirds are treated with Taxotere (Aventis Pharmaceuticals Inc.) or anthracyclines.

"If priced about half of what current therapies are priced at, [tesmilifene] would probably have something in the neighborhood of $500 million in sales a year in Europe and the U.S.," Allan said.

But the potential for the product is far greater when looking at additional indications. YM already has Phase II data on the product in hormone-refractory prostate cancer, an area that it plans to further explore. The breast cancer indication is only the beginning, Allan said.

"Strategically, this is the key to the door that takes us into the corridor," he said. "If this drug were only about metastatic breast cancer, then it would not be interesting. What's interesting is that if this drug achieves approval in this current form, then it has the prospect of having a significant penetration of multiple tumors in terms of enhancing the activity of multiple chemotherapies."

The ongoing Phase III trial is enrolling 700 patients who are receiving tesmilifene plus anthracyclines. The primary endpoint is overall survival. A previous Phase III trial failed to meet its primary endpoint of tumor-response rates, but did hit the secondary survival endpoint.

"It was an error to look at tumor-response rates because it didn't show any," Allan said, "but there was a very significant difference in overall survival."

The results showed that patients receiving a tesmilifene/doxorubicin combination therapy lived about 50 percent longer than those receiving doxorubicin alone (23.6 months vs. 15.6 months). YM decided to use overall survival as the primary endpoint in the second Phase III as part of a special protocol assessment with the FDA.

YM's product TheraCIM targets the epidermal growth factor receptor. The company received orphan drug designation in Europe and expects to move the product into a Phase II/III trial later this year in glioma. That trial could lead to registration in the U.S. The product would compete with New York-based ImClone Systems Inc.'s Erbitux. Allan believes YM has a "competitive product" in TheraCIM as it causes no acne rash and offers a lower dosage.

Proceeds from the bought-deal financing also will help advance YM's other two clinical products. The immunopharmaceutical Norelin could move into clinical trials in all hormone-driven cancers if a Phase II in hormone-sensitive prostate cancer is successful. Norelin stimulates the immune system to develop antibodies to gonadotropin-releasing hormone, restricting the growth of all sex-hormone-dependent cancers. And YM's fourth clinical product, RadioTheraCIM, is a radiolabeled humanized monoclonal antibody that is in an ongoing pilot study in glioma.

YM prides itself as solely a development company, one that in-licenses its products and plans to partner them for marketing purposes.

"At this point in time, we are strictly in the business of development," Allan said, "so the ultimate goal is to partner the drugs after we have provided the development process to proof of principle or event after the Phase III."

The company likely will file an NDA for tesmilifene on its own, before partnering the drug for marketing, he said.

YM's stock (TSE:YM) dropped 18.3 percent, or C66 cents on Tuesday, to close at C$2.94.


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