Chemgenex raises $8m for clinical trials

Chemgenex Pharmaceuticals (ASX: CXS) has raised US$6.2 million (AUD$8.2 million) in a placement to existing and new shareholders including a number of US investors.

The funds will be used by the company to support its upcoming Phase II clinical trials of its leukemia drug Ceflatonin as well as its push to achieve a NASDAQ listing by the middle of the year.

"It's fantastic to put that sort of money into the bank -- it gives us a couple of solid years of burn," said CEO Greg Collier.

Collier said that major shareholders Charter Pacific, QIC and Merck Sante all participated in the placement, with Charter Pacific maintaining its 20.1 per cent stake in the company and QIC increasing its holdings to 9.7 per cent. Among the new Australian investors were HSBC and Acorn Capital, and 44 per cent of the oversubscribed placement went to US investors. The shares were issued at a price of AUD$0.55 -- a discount to the current price, which at the time of writing was $0.65.

Collier said the success of the placement would bolster the company's US investor support as it moved to complete a full Level 2 ADR program with a NASDAQ listing, expected mid-year.

"We're at the stage where we have just about completed all of the preparations -- the accounting requirements are effectively done, and we're due to submit the 20-F filing to the SEC next month," Collier said.

Chemgenex has had a level 1 ADR program in place since late 2002.

Collier said the NASDAQ listing would help to drive Chemgenex's value to where it should be with two pharmaceutical partnerships and two drugs in Phase II clinical trials.

The company hopes that it can obtain fast track status for its leukemia drug Ceflatonin, which has shown promise as a treatment for chronic myeloid leukemia patients developing Gleevec resistance, and in patients with myelodysplastic syndrome who have failed other treatments. Phase II clinical trials for both of these indications are due to commence this year.

Late last year, the company commenced a Phase II clinical trial in prostate cancer patients for its drug Quinamed, which is uniquely coupled to a genetic test allowing the determination of optimal dosage levels for each individual patient.