RESEARCH TRIANGLE–Incara Pharmaceuticals (OTC:ICRA) has closed a private placement of 41,040,000 shares of common stock for $10.26 million.

Investors included, among others, Biotechnology Value Fund, Perceptive Life Sciences and Great Point Partners. SCO Securities LLC acted as exclusive placement agent for the transaction.

In connection with the financing, Goodnow Capital, L.L.C., an investment entity controlled by the Xmark Funds, advanced the remaining $2.5 million of its $5 million convertible debenture and converted the entire debenture into common stock.

The company says the money will be used to support its only remaining drug development program, a treatment for amyotrophic lateral sclerosis (ALS, known as Lou Gehrig’s Disease). The company is in the final stages of preparing its Investigational New Drug (IND) application for the U.S. Food and Drug Administration.

“The proceeds from this financing provide Incara with adequate resources to move our catalytic antioxidant program through Phase 1 clinical trials and into a pivotal efficacy trial. These steps are important milestones for our company,” stated Clayton I. Duncan, president and CEO of Incara.

The new financing bolsters the company’s rocky fortunes.

Incara suffered a series of setbacks in its drug development programs stretching back to the late 1990s.

Following poor clinical trial results for its leading candidate, a beta blocker in 1999, the company’s stock price plummeted. It was eventually de-listed from Nasdaq for failing to maintain a stock price over a dollar, and moved to the Over-the-counter market.

It acquired additional financial support from the Irish drug giant Elan, which later experienced its own series of financial set-backs.

Incara eventually sold off all but one of its remaining research programs, a very powerful “catalytic antioxidant” treatment that may help ALS patients.

Catalytic antioxidants are a new class of small molecule antioxidants that destroy oxygen-derived free radicals, believed to be an important contributor to the pathogenesis of many diseases. Incara’s catalytic antioxidants have been shown to reduce damage to tissue in animal studies of neurological disorders such as ALS and stroke, and in other non-neurological indications such as cancer radiation therapy, chronic bronchitis and asthma.