ChemGenex raises $6.2 million

ChemGenex Pharmaceuticals (formerly AGT Biosciences; ASX: CXS) has raised AUD$6.2 million through a 15 per cent placement to existing and new shareholders at $0.48 per share, a discount of almost 15 per cent to yesterday's closing price of $0.56.

Major shareholder Merck Sante invested $1.5 million to increase its holding in ChemGenex to 8.8 per cent, while Queensland Investment Corp (QIC) contributed $1.4 million, taking its holding to 8.5 per cent. The remaining shares were placed with institutional and sophisticated investors.

"In a difficult capital market, we strongly pursued [the raising] and we are very happy with the results," said ChemGenex's business development manager Dr James Campbell.

Campbell said the increase in holdings by Merck and QIC indicated their level of confidence in the company following the merger of AGT and private US biotech company ChemGenex Therapeutics.

"It was a very tacit expression by [Merck] that they wanted to stay involved, and a very strong endorsement of our infrastructure and the strategy we've taken," he said.

The funds will be used to further develop the company's two lead clinical programs, anti-cancer drugs Quinamed and Ceflatonin, which are both currently undergoing Phase II clinical trials in the US.

Last month, the company presented positive Phase I/II results at major oncology meeting ASCO for Quinamed, which is being tested on patients with a variety of solid tumours. Quinamed is unique as it is linked to a genotyping test that determines how a patient will metabolise the drug, so that the appropriate dose can be identified prior to treatment, minimising toxicity and side effects. The Phase II trial is ongoing.

Campbell said the company was in active discussions with a number of potential partners for the two programs, with the aim of partnering prior to commencing Phase III trials.