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approval by the Nasdaq, which depends on a set of criteria that include having a bid price of at least $4 per share, at least 300 shareholders, and at least 1 million publicly held shares, among other requirements. A Cellectar spokeswoman declined to comment, citing a company quiet period while the Nasdaq considers its application. But in mid-July, the company’s stock was trading above $6 per share, and its investors held 2.87 million shares.
The company has disclosed plans to trade on the Nasdaq at least once before, back in July 2011, three months after Novelos acquired it. But the company pulled back until now, when its stock price is higher and the R&D pipeline looks stronger.
“My personal opinion is I’m quite confident that we will succeed this time,” says Wisconsin businessman Jeff Straubel, an early investor in Cellectar. “It has most to do with the fact that I think we are gaining a good deal of acceptance with the right community,” namely scientists. Straubel cited recent buzz among researchers after Cellectar published a study in Science Translational Medicine that showed its compounds were effective in imaging and treating human tumors that had been surgically grafted into mice, and in detecting tumors in a small group of human patients—although a co-author of the study told The Scientist that more clinical work will be required to “optimize the imaging and therapy parameters.”
But the potential of Cellectar’s science won’t affect the outcome of its Nasdaq application, which will likely be decided upon in the next 60 days or so, Marquette University’s Krause estimates. The decision will have a huge impact on the company’s future. Cellectar’s ability to raise additional financing to develop its cancer drugs and imaging agents likely hinges on making it on the Nasdaq exchange, says investor Straubel. Straubel is president and majority owner of Wisconsin-based Greenway Properties, which currently holds nearly 22 percent of Cellectar’s shares, SEC filings show. “These sophisticated, larger biotech investors, especially, only deal with companies which are traded [on a major exchange] and have a good deal of liquidity,” Straubel says. “They just don’t take a company as serious which has a very low liquidity and a very low stock price.”
Cellectar was founded in 2002 by UW-Madison radiology professor Jamey Weichert, who currently serves as chief scientific officer. The company raised more than $23 million in venture capital between 2002 and 2010 to develop compounds from Weichert’s lab called phospholipid ethers (PLEs). Researchers have known for several decades that these PLEs have an unusual and potentially valuable property: The PLEs become trapped inside malignant tumor cells because cancer cells apparently don’t have the ability to metabolize and eliminate the molecules. As a result, PLEs could be used as a vehicle for fluorescent or radioactive material that would help detect and map the locations of cancer cells, or to deliver drugs or sources of radiation to the cancer cells. Such targeted drugs should theoretically cause far less damage to healthy cells than typical cancer drugs do, thus minimizing side effects. Cellectar has created three novel cancer-targeting products that utilize PLEs: one therapeutic compound and two imaging agents that are at various stages of development, from pre-clinical to a Phase II trial.
The product pipeline showed enough promise for Novelos to snatch up Cellectar in 2011, a year after Novelos’ leading cancer drug candidate failed a Phase III trial. Novelos moved to Madison to continue developing Cellectar’s products. The combined company renamed itself Cellectar Biosciences (OTCQX: CLRB) this year and raised $4 million in a private placement offering of convertible debt. The new money will help fund a Phase II trial of its positron emission tomography (PET) imaging compound in glioblastoma, a type of brain or spinal tumor.
If Cellectar does win Nasdaq approval, it won’t be the only small biotech that successfully graduated from the OTC market to a bigger exchange. San Diego-based Halozyme Therapeutics, for example, went from privately held to trading OTC in 2004 when it completed a reverse merger with Global Yacht Services. It later traded on the American Stock Exchange (now the small-cap NYSE MKT), before joining the Nasdaq in 2007.
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