Prolor Biotech Inc. (Bulletin Board: PBTH) has raised $24.4 million in a private placement to institutional and private investors. The company has raised $32 million to date.
Prolor's largest investor, new Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) chairman Philip Frost, did not participate in the private placement.
Prolor president Shai Novik told "Globes", "Institutional investors want to see that the company has diversified shareholders. That's why we chose the current investors, most of which are biotech institutional investors."
The company sold 10.4 million shares to investors at $2.35 per share, a 17% discount on the average share price in the 30 days prior to the sale. The shares are not registered for trading, and are subject to a one-year lockup agreement.
Novik added, "The point was to raise capital only from investors who want to stick with us for the long term. A number of parties who were very interested declined to invest when they saw the structure of the deal, but even so we raised more than we planned."
Ness Ziona-based Prolor owns a use license for a CTP peptide, which is attached to biological drugs to slow down the molecule's breakdown by the body. Prolor has the rights to use the peptide for all indications, except for fertility treatments. During 2009, the company carried out a trial on monkeys of beta interferon drugs for the treatment of multiple sclerosis. The study found that the CTP peptide made it possible to reduce the dosage 55-fold while still achieving effectiveness. This reduction also greatly reduces the side effects of the drug.
Prolor has also conducted a Phase I human clinical trial of a CTP-enhanced human growth hormone. The trial found that it was possible to give a dosage once every two weeks, instead of daily.
Merck & Co. (NYSE: MRK), which uses the CTP peptide in fertility treatments, has obtained certification for its product, Elovna. This approval provides a kind of certification for Prolor's technology.
Prolor plans to complete a Phase II clinical trial on its CTP-enhanced human growth hormone and for the CTP-enhanced beta interferon drug, and to begin trials for CTP-enhanced clotting factors for the treatment of hemophilia, and for CTP-enhanced obesity drug.
"Proceeds from the financing will enable us to reach Phase III trials of the human growth hormone. The money will be enough through mid-2012," said Novik. "During this period, we may already sign licensing agreements, which will generate more revenue."
Prolor's share closed at $3.02 in New York on Friday.
Published by Globes [online], Israel business news - www.globes-online.com - on March 21, 2010
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