June 7, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — Bio-Path Holdings, Inc. (OTCBB: BPTH), a biotechnology firm with drug development operations in Houston, Texas said that it has signed an equity purchase agreement for up to $7 million with Lincoln Park Capital Fund, LLC, a Chicago-based institutional investor.

Bio-Path said it is developing a neutral lipid-based liposome delivery technology for nucleic acid cancer drugs, a delivery technology that forms tiny vehicles to safely deliver these drugs to their intended target cancer cells. The U.S. Food and Drug Administration  has recently allowed an Investigational New Drug for the company’s lead cancer drug candidate liposomal Grb-2 to proceed into clinical trials.

Under the terms of the equity purchase agreement, Bio-Path has the right to sell shares of its common stock to LPC from time to time over a 24-month period in amounts between $50,000 and $1 million up to an aggregate amount of $7 million, depending upon certain conditions set forth in the purchase agreement, including that a registration statement related to the transaction has been declared effective by the U.S. Securities and Exchange Commission.

Upon signing the agreement, Bio-Path said it received $200,000 from LPC as an initial purchase in exchange for 571,429 shares of the company’s common stock and warrants to purchase 571,429 shares of the company’s common stock at an exercise price of $1.50 per share. Subsequent purchases of the company’s common stock by Lincoln Park under the agreement do not include warrants, according to Bio-Path.

Bio-Path said it plans to use the proceeds received by the company under the purchase agreement for the Phase I clinical trial expenses for the company’s lead cancer compound and for general working capital.

The company also reported that, prior to closing the LPC purchase agreement, it sold $273,000 of common stock and warrants in a Regulation D private placement offering to accredited investors.

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