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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Monday, July 28, 2008
Celator Pharmaceuticals Raises Series C Financing in Excess of $22.5 Million
Comtex
PRINCETON, N.J., July 28, 2008 /PRNewswire-FirstCall via COMTEX/ ----Celator Pharmaceuticals, a privately held pharmaceutical company developing novel products based on proven combinations of chemotherapeutic drugs, today announced that it raised in excess of $22.5 million in a Series C private equity financing.
All Series B investors participated in the financing and included; Domain Associates, Ventures West, Quaker BioVentures, TL Ventures, GrowthWorks Capital, and BDC Capital.
The proceeds will be used to fund Phase 2 studies of CPX-351 (a liposomal formulation of cytarabine:daunorubicin) in patients with acute myeloid leukemia. The company expects to start enrolling patients in a Phase 2 study of CPX-351 in newly diagnosed, elderly patients with AML before the end of 2008. Celator will continue to develop other CombiPlex(TM) products from its pipeline alone or in collaborations with pharmaceutical partners.
"This financing reflects the strong, continued support of our investors both in the company and our products," said Scott Jackson, chief executive officer of Celator Pharmaceuticals. "Our goal is to extend and enhance the lives of people with cancer. As a result, we have developed an oncology product pipeline that has significant commercial potential. These funds will allow us to conduct additional clinical trials and generate data that we believe will enable strategic partnerships with leading biotech and pharmaceutical companies."
Celator reported encouraging interim Phase 1 data with CPX-351 in December 2007 where complete remissions were obtained in patients with advanced leukemia. The company plans to submit additional CPX-351 pre-clinical and clinical data to this year's American Society of Hematology (ASH) meeting in December. In addition, positive Phase 2 clinical study results were reported for CPX-1 (a liposomal formulation of irinotecan:floxuridine) in patients with advanced colorectal cancer at the American Society of Clinical Oncology (ASCO) meeting in May 2008.
"Over the last few years the company has developed a pipeline of product opportunities based on the CombiPlex technology," said Nicole Vitullo, partner at Domain Associates. "We believe that Celator's products may well represent the next generation of chemotherapeutics."
Kenneth Galbraith, general partner at Ventures West, joins Celator's Board of Directors. Mr. Galbraith is a well-known and active member of the North American life sciences community with over 20 years of experience acting as an executive, director, investor and advisor to companies in the biotechnology, medical device, pharmaceutical and healthcare sectors.
About Celator
Celator Pharmaceuticals, Inc., with locations in Princeton, NJ, and Vancouver, BC, is a privately held pharmaceutical company developing new and more effective therapies to treat cancer. CombiPlex(TM), the company's drug ratio technology platform, represents a revolutionary new approach to the development of combination therapies based on identifying a fixed, synergistic ratio of the drugs pre-clinically, incorporating that ratio in a drug delivery vehicle and maintaining the ratio in patients. The company pipeline includes: CPX-1 (a liposomal formulation of irinotecan:floxuridine), currently in a Phase 2 trial in patients with colorectal cancer; CPX-351 (a liposomal formulation of cytarabine:daunorubicin), currently in a Phase 1 trial in patients with leukemia; CPX 571 (a liposomal formulation of irinotecan:cisplatin), a pre-clinical stage compound; and multiple research programs. Based on the applications of CombiPlex, Celator is positioned to advance a broad pipeline of combination therapies involving both previously approved and novel drug agents. For more information, please visit the company's website at www.celatorpharma.com.
SOURCE Celator Pharmaceuticals
Copyright (C) 2008 PR Newswire. All rights reserved
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