Techniclone Tries to Squelch Buyout Rumors
In an attempt to squelch buyout rumors, Techniclone International Corp. said Tuesday that it is continuing negotiations with an unidentified private investor whose $7.3 million in preferred stock would fund more tests of a cancer treatment the company has developed.
The Tustin-based company said the erroneous buyout rumors have sent its stock price soaring. Techniclone closed Monday at $4.12 a share, having risen from $2.12 a share a month earlier on Dec. 13 in over-the-counter trading.
The money would be used primarily for the final round of tests required on the company’s LYM-1 antibody before the U.S. Food and Drug Administration approves sales of the drug. The remainder of the stock proceeds would fund research on new products.
Developed in 1984, LYM-1 has been tested on about 50 terminally ill patients who are suffering from lymphoma, which is cancer of the lymph nodes. The treatment has resulted in substantial improvement in about half of the test patients at UC Davis, Techniclone Chairman Lon H. Stone said.
Of those treated, 30% of the patients had their illness go into complete remission and 20% saw their tumors reduced in size by at least half, according to the company. Most of the patients had expected to live less than six months before trying LYM-1 in a test partly funded by the National Cancer Institute, a federal agency that oversees research into cancer.
Unlike traditional treatments that involve periodic radiation treatments of both the tumor and surrounding tissue, LYM-1 is a solution containing molecules of antibodies and radioactive iodine that attaches itself to tumors. The company said that when a patient gets a LYM-1 injection, he receives the effects of chemotherapy without the side effects.
Stone said the final round of tests would involve 50 to 100 patients at different medical facilities, which are yet to be selected. If the FDA approves LYM-1, Techniclone could tap a potential $100-million market that larger biotechnology companies have passed up as being too small to merit the high development costs.
In order to complete the tests, Techniclone is negotiating with an investor who would receive 100,000 shares of preferred stock. It could later be converted into 6.7 million shares of common stock, giving the new investor about one-third ownership of the company. Techniclone presently has 11.5 million shares of stock outstanding.
