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Marina, on Track with FAP Drug, Starts Looking to Raise Needed Cash

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By Doug Macron

Marina Biotech is on track to complete a phase Ib/IIa trial of its familial adenomatous polyposis treatment by the second quarter of next year, and is continuing to develop nucleic acid-based drugs based on technologies other than RNAi, the company's top official said this week.

However, the company's ability to finance these efforts remains a critical issue; according to its first-quarter financial report, Marina had less than a quarter's worth of cash in the bank as of March 31. It now hopes to gross as much as $13.8 million through a newly announced public stock and warrant offering.

The FAP drug, called CEQ508, is based on Marina's so-called transkingdom RNAi technology, which uses orally delivered attenuated Escherichia coli to transcribe therapeutic shRNAs. The drug is designed to inhibit the oncogene beta-catenin as a way to prevent the formation of the colorectal polyps that characterize the disease, and potentially slow the progression of existing ones to malignancy.

Marina acquired the program when it bought Cequent Pharmaceuticals last year (GSN 4/1/2010).

Earlier this year, the drug moved into a phase Ib/IIa trial, which will initially evaluate escalating doses of the drug in 12 FAP patients. This part of the study is expected to wrap up in the fourth quarter, Marina President and CEO Michael French said during the firm's first-quarter earnings conference call.

“Following the active dosing period of the last cohort, the data safety monitoring board will review the data and determine the highest safe dose for the stable dose phase of the trial,” he said. “We anticipate completing the stable dose phase in the first quarter of 2012 … [and] a complete data set from the phase Ib/IIa trial should be available in the second quarter of 2012.”

Interim analyses of the data will be conducted on a cohort-by-cohort basis, French added. Marina may choose to release preliminary data before the study ends, but this decision will be made in collaboration with the study's principal investigator, Massachusetts General Hospital researcher Daniel Chung.

Meanwhile, Marina continues to advance earlier-stage technologies including so-called conformationally restricted nucleotides, which essentially comprise nucleotide analogs to which the C2' and C4' carbon bonds of the ribose ring are linked. These can be used to develop single-stranded oligos that act as antisense molecules, as well as microRNA mimics and antagonists.

French had previously said that such technologies are expected to give Marina an edge as it seeks new big pharma partners after licensing its preclinical bladder cancer program to Swiss drug maker Debiopharm in February (GSN 2/3/2011 & 2/17/2011).

“We feel the Debiopharm collaboration … is a strong validation of our drug-discovery engine,” French said this week. “We believe we can establish partnerships around this broader platform, including both R&D collaborations and licensing deals.”

He did not, however, provide any guidance on when such deals might be forged.

French also provided little color on Marina's pipeline beyond CEQ508, only briefly referring to ongoing work on a treatment for malignant ascites, a complication of cancer characterized by massive fluid accumulation in the abdomen. No mention was made of the company's preclinical program in liver cancer, which Marina has said could be ready for an investigational drug application filing by the end of 2011.

According to a Marina filing with the US Securities and Exchange Commission, advancing these programs will require additional financing. At the end of the first quarter, Marina expected its funds to last only “into the second quarter.”

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Aiming to extend that runway, the company separately announced this week that it would look to publicly sell $13.8 million in stock and warrants by the end of the week.

Marina said it will offer about 22.3 million units, each consisting of one share of common stock and a Series A warrant to purchase one share, at $0.31 apiece, which would gross the company $6.9 million. The warrants have an exercise price of $0.39 per share and will be subject to shareholder approval of an increase in Marina's authorized common stock.

In addition, Marina is offering about 22.3 million Series B warrants to purchase one stock-and-warrant unit, exercisable at $0.31 each.

“If fully exercised at $0.31 per unit, the Series B warrants will result in the issuance of an additional [22.3 million] shares of common stock and Series A warrants exercisable for an additional [22.3 million] shares of common stock being issued for additional gross proceeds of approximately $6.9 million,” Marina said.

This would raise the total value of the offering to $13.8 million before expenses.

Q1

For the first quarter, Marina's net loss narrowed to $3.7 million, or $0.12 per share, from a year-ago loss of $9.5 million, or $0.80 a share.

Revenues in the period remained flat year over year at $200,000, while R&D expenses dropped to $3.4 million from $3.6 million, primarily because of a decrease in patent-license fees.

Selling, general, and administrative costs fell to $1.9 million from $2.6 million, mostly as a result of the completion of the Cequent acquisition.

As of March 31, Marina had cash of about $2.3 million, of which about $1.2 million was restricted.


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