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From:- http://www.biotechnologynews.net/default.aspPrima lands $25.5M funding facility

Nick Evans
Tuesday, 21 July 2009

PRIMA BioMed has landed a $25.5 million convertible note facility to fund its clinical trial program for ovarian cancer treatment CVac, ending any uncertainty over whether the product will be tested in a larger patient group.



The convertible notes, which will be drawn down in $700,000 tranches over the next three years, have been offered to the company by New York-based investment fund Springtree Special Opportunities Fund.

Prima will draw down $1 million of the notes over the next two weeks and then take another $700,000 tranche every 30 days, to a total of $25.5 million.

Unless Prima elects to repay the notes in cash, they will automatically convert to Prima shares every month, valued at the lower of 130% (or 150% in some cases) of the average Prima closing price for the 20 business days before the date of this agreement – around 8c, by BTN’s calculations – or 90% of the volume-weighted average share price for the five-day period immediately before the relevant repayment date.

Prima said that, as the convertible note repayments were based on an assumed capital appreciation of its shares, they would carry no additional interest, unless the company defaulted on the terms.

Prima will need to take the funding deal to its shareholders once the share conversions get past the 15% threshold.

Clinical trial program

Prima says the funding will initially be used to kick off a Phase 2b trial for CVac, expected to begin sometime in the fourth quarter of this year.

Prima executive director Martin Rogers told BTN this morning that the company had agreed to trial protocols with the US Food and Drug Administration, but was still sorting through manufacturing issues. As the company is intending to establish both US and Australian manufacturing facilities for the two arms of the trial, it needs to develop rigorous testing protocols to assure the FDA that exactly the same product will be delivered across the entire trial.

Rogers said the Phase 2b trial had been designed so it could be enlarged into a full-blown Phase 3 pivotal trial if early results justified its expansion.

Background

CVac is a vaccine therapy treatment for ovarian cancer administered post-surgery and post-chemotherapy to delay relapse and control metastases.

CVac consists of a patient's own dendritic cells primed with a tumour antigen (Mucin-1) and an adjuvant, mannan fusion protein (M-FP).

M-FP refers to the form in which the target protein of the CVac immunotherapy is presented to the immune system. The mannan used is a chain of mannose molecules that is oxidised and linked to the cancer protein (Mucin-1). Mannan stimulates the immune system and it is the mannan that results in rapid uptake of Mucin-1 into the dendritic cells of the immune system via the mannose receptor on the cell surface.

Once the M-FP is inside the dendritic cell, enzymes digest the Mucin-1 and fragments of Mucin-1 are presented on the dendritic cell surface. This presentation results in the stimulation of certain cells of the immune system to target Mucin-1 on the surface of cancer cells.

CVac cleared Phase 2a trials in early 2007, but has since languished as Prima struggled to raise money to complete its clinical trial program.

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