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MEI Pharma announces $27.5 million private placement

San Diego-based MEI Pharma Inc. (Nasdaq: MEIP), an oncology company focused on the clinical development of novel therapies for cancer, has obtained commitments to purchase $27.5 million of its common stock and warrants in a private placement.

The financing was led by new investors Vivo Ventures and New Leaf Venture Partners with participation from additional institutional investors, including RA Capital Management and Three Arch Opportunity Fund, among others.

"We and Vivo Ventures are excited to have had the opportunity to build a high-quality syndicate of long-term investors that allows MEI Pharma to aggressively pursue development of Pracinostat," said Srini Akkaraju, M.D., Ph.D., managing director at New Leaf Venture Partners. "We are particularly encouraged by Pracinostat's evidence of clinical activity in hematologic malignancies with large unmet medical needs, such as myelodysplastic syndrome and acute myeloid leukemia."

MEI Pharma has entered into a securities purchase agreement with the investors pursuant to which the company will sell units consisting of an aggregate of 55 million shares of its common stock and warrants to purchase up to 38.5 million additional shares of common stock. Each unit, consisting of one share of common stock and a warrant to purchase 0.7 of a share of common stock, will be sold for a purchase price of $0.50. The warrants will be exercisable at $0.52 per share. Upon closing of the transaction, the warrants will be immediately exercisable and will expire five years from the date of issuance.

MEI Pharma intends to use the net proceeds from the private placement primarily to advance the clinical development of Pracinostat, an oral histone deacetylase (HDAC) inhibitor acquired by the company in August 2012, and its isoflavone-based drug candidates.

Stifel Nicolaus Weisel acted as the sole placement agent for the offering. ROTH Capital Partners and Trout Capital served as advisors to the Company.

The private placement is subject to customary closing conditions and is expected to close in December 2012.

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