Argos Therapeutics reached an investment deal that provides up to $60 million in financing as the drug developer plows ahead on late-stage clinical trial work for its experimental immune-based kidney cancer treatment.
Durham, NC-based Argos (NASDAQ: ARGS) said Monday that the private placement financing should provide the company enough cash to last until it reaches a pivotal milestone: final Phase 3 clinical trial results for its cancer immunotherapy, AGS-003. The company expects those results will be reported in the second quarter of next year. Investors in the private placement include Pharmstandard International; Foragos; Tianyi Lummy International Holdings Group; China BioPharma Capital I; TVM V Life Science Ventures; and Wasatch Funds Trust.
Some of these investors are already well acquainted with Argos. The company last year raised $10 million by selling stock to China BioPharma Capital I and Tianyi Lummy. That financing followed an agreement in which Argos licensed rights to develop and sell its treatment in China to a subsidiary of China-based Chongqing Lummy Pharmaceutical Co. Argos could gain up to $20 million if the cancer treatment hits clinical trial and regulatory milestones in China, plus royalties on sales if the treatment reaches the market.
The latest Argos financing, in the form of stock and warrants, will take place in three tranches. Argos says it will raise $19.8 million from the first tranche, which is expected to close on March 9. That initial cash infusion is expected to carry the company through the third quarter of this year. Argos could close the second tranche of $29.8 million on a positive recommendation from independent data monitoring committee—either that the study continue, or that the study be discontinued based on the results showing favorable efficacy. Last December, that independent board recommended the trial continue, based on a planned interim analysis of the trial. Under the private placement agreement, Pharmstandard holds the option to purchase shares for the third tranche, raising $10.2 million for Argos.
The Argos treatment is based on the company’s immunotherapy platform, called Arcelis. The company says that its technology takes a sample of a tumor, along with a patient’s own dendritic cells—cells that start the body’s immune response—and programs the dendritic cells to target the cancer. The resulting treatment, personalized to the patient’s cancer, can then be administered by injection.
Argos’ lead target for its cancer immunotherapy is renal cell carcinoma, which the American Cancer Society says is the most common form of kidney cancer. In the Phase 3 trial, Argos is evaluating how well its treatment works to extend overall survival when combined with the current standard of care, the Pfizer (NYSE:PFE) drug sunitinib (Sutent), compared to the Pfizer drug alone.