San Diego’s Cardium Raises About $30 Million

By Penni Crabtree, The San Diego Union-Tribune

Oct. 21–Biotechnology startup Cardium Therapeutics said yesterday that it raised about $30 million in a private financing and merged into a publicly traded shell company to gain a stock market listing.

The San Diego company said proceeds from the financing will be used to acquire a portfolio of experimental drugs to treat heart disease, including a gene therapy called Generx, from Germany’s Schering AG.

The biotech plans to apply for its stock to be listed on the Nasdaq stock market or the American Stock Exchange. It now trades over the counter under the symbol ARVT, which is held by the shell company, Aries Ventures.

“This is a substantial milestone for our stockholders, and sets the stage for us to pursue our business plan aggressively with substantial capital resources,” chief executive Christopher Reinhard said in a written statement.

Reinhard did not return telephone calls.

Cardium’s proposed lead experimental product, Generx, comes with a problematic past. Generx was developed by former San Diego gene therapy company Collateral Therapeutics, which was acquired by Schering in a $140 million stock deal in 2002.

Generx is designed to treat patients suffering from angina, a painful disorder that occurs when the heart doesn’t get enough oxygen, usually because arteries that feed blood to the heart are clogged.

The Schering product consists of a disabled virus that delivers a human growth-factor gene to the heart. The gene is supposed to trigger heart cells to produce a growth hormone that stimulates the growth of new blood vessels.

Though the therapy showed promise in early clinical trials, Schering AG last year halted a late-stage Phase 3 human study of Generx after an interim analysis found “insufficient evidence” that it benefited patients.

Schering terminated its cardiovascular research program, including its work with Generx.

Cardium was formed to acquire Schering’s portfolio of discarded cardiovascular growth factor drug candidates. A later, subgroup analysis of the data from the failed Schering clinical trial yielded “positive efficacy insights,” according to Cardium.

Data from retrospective subgroup analyses often come under fire from scientists because it is subject to cherry-picking — taking a nugget of positive results from overwhelmingly negative or neutral data and hypothesizing about it.

Following the merger with an Aries Ventures’ subsidiary and the private financing, Cardium will have 29.2 million shares of common stock outstanding.

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