IDMC clearance unlocks $30 million for Argos Therapeutics Inc. (NASDAQ: ARGS)


Argos Therapeutics Inc. (NASDAQ: ARGS) is set to receive $30 million from the sale of equity to certain investors. That is part of a pre-negotiated deal tied to the development pathway of Argos’ cancer drug candidate called AGS-003. An independent safety board (IDMC) recently recommended that Argos can continue with the trial of AGS-003 toward offering it as a treatment for kidney cancer.

Argos Therapeutics Inc. (NASDAQ: ARGS) had negotiated with certain investors that they would provide the company with funding in exchange for equity stake. But receiving the funding depended on the recommendation of the independent safety board monitoring early indications of AGS-003 in trial patients.

If the independent monitors note adverse safety effects in patients taking an experimental drug, they can recommend halting of its trial. In such a case, the developer goes back to the drawing board. But if they are pleased with the early indications of the experimental drug, they issue the green light for the continuation of the trial and development of the compound as a treatment as in the case of ARGS’ AGS-003.

Confidence booster

Not only does the clearance of AGS-003 by the independent reviewers unlock additional funding for ARGS, it also comes as a confidence boost to the developer. But investors in ARGS didn’t initially celebrate the recommendation of the independent safety board because of the dilutive impact of the equity sale. The shares that ARGS will be selling to receive $30 million and possibly up to $60 million in the future will erode value for existing shareholders. Nevertheless, the long-term benefit of the equity deal far exceeds the adverse impact of the dilution.

Late-stage trial Argos Therapeutics Inc. (NASDAQ: ARGS)

The clearance from the independent safety board now means that Argos Therapeutics Inc. (NASDAQ: ARGS) can carry on with the Phase 3 trial of AGS-003. The clearance also comes after ARGS recently lowered its cash burn by retrenching some of its employees. ARGS said the layoff would save it about $2.3 million annually in operating costs.


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