Japanese biopharmaceutical company Sosei is looking to raise 3.9 billion yen, or just over £17 million, through a share issue which will help further development of its late-stage cancer breakthrough pain drug.

The company is selling stock acquisition rights (SARs) to Merrill Lynch priced at 217,000 yen and up 18,000 shares may be issued upon exercise of SARs, which represents approximately 18% of the current issued share capital.

Sosei said that the funds will principally be used to complete development of AD 923, which an optimised, sublingual formulation of the strong opioid analgesic fentanyl for use in cancer breakthrough pain. Phase III trials in Europe and the USA are scheduled to start during 2007 and the company noted that it out-licensed marketing rights for AD 923 in Europe in 2006 to Mundipharma “which has strong expertise in this area.” Partners are also being sought in the USA and Japan, Sosei stated, concluding that the fundraising and completion of the AD923 trials will help it find the right deal.

The fundraising is good news for Sosei coming soon after it announced that its candidate treatment for rheumatoid arthritis, AD 452, had failed to meet primary and secondary efficacy endpoints in a Phase IIb clinical trial and was being discontinued.

The Japanese firm currently has six products in development, notably NVA237 for the treatment of chronic obstructive pulmonary disease, the rights to which have been granted to Novartis and the Swiss giant is expected to file a New Drug Application for the compound in 2010.