YM BioSciences (NYSE Amex: YMI, TSX: YM), the drug development company advancing three clinical-stage products has filed a preliminary short form base shelf prospectus with securities regulatory authorities in Canada and the United States.
Once the shelf prospectus is cleared and the registration statement becomes effective, these filings will allow the Company to issue a combination of shares and warrants to raise up to US$125 million, during the 25-month period that the final short form base shelf prospectus remains effective. Already the company has an existing base shelf prospectus and registration statement, which is due to expire on October 17, 2011.
The Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in an accompanying prospectus supplement.
While company officials say that the Company has no intention of conducting a financing at this time, the pressure of this shelf filing will certainly not help attract traders to the stock, which dropped in early June from over $3.70 to as low as $2.40. Then bounced to close to their 50-day moving average at $3 before losing some steam. Now the technical indicators have turned sour and we could see a return to levels at the 200-day moving average.
Some investors have been buying YM BioSciences after recent coverage of the stock touted them as undervalued compared to Incyte Corporation (Nasdaq: INCY), a peer which is developing a similar experimental myelofibrosis drug treatment currently under FDA review.
As is the case with most biotechnology companies, since YM BioSciences' incorporation in 1994, they have not generated any significant revenues. None of their products, licensed or owned, has received regulatory approval for sale in any major market country in which they have an economic interest in a product. In fact, the filing indicates that as at March 31, 2011, they have accumulated deficit of $190,419,905.
As mentioned previsously, the company is advancing three products in clinical development:
CYT387 is a small molecule inhibitor of the JAK1 and JAK2 enzymes. Dysregulated JAK2 has been implicated in a number of diseases, including myeloproliferative neoplasms, cancers such as leukemia and lymphoma, solid tumours and a variety of autoimmune diseases.
Nimotuzumab, a humanized monoclonal antibody targeting the protein known as EGFR, is designed to treat epithelial cancers and can be administered prior to, simultaneously with, or subsequent to, chemotherapy and radiotherapy.
CYT997, a small molecule tubulin polymerization inhibitor, is being developed for the treatment of cancer. A vascular disrupting agent that has also demonstrated cytotoxicity as a single agent, CYT997, is able to be administered orally as well as intravenously to patients.
In addition, their portfolio contains a library of approximately 4,000 novel small molecules, some of which we have already identified as having development potential.
A copy of the preliminary prospectus included in the registration statement and the Canadian preliminary short form base shelf prospectus is available at this link.
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