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Ahead of Solzira Resubmission, XenoPort Adds $40M in Offering
(BioWorld Today Via Acquire Media NewsEdge) Financings Roundup
XenoPort Inc., which missed out on an anticipated $23 million milestone payment this quarter after partner GlaxoSmithKline plc yanked the new drug application for Solzira in restless legs syndrome (RLS) due to a filing glitch, beefed up its balance sheet with a $40 million registered direct offering.
Not that the firm was in dire need of funding. While about half of U.S. biotechs might be ending 2008 with less than a year of cash, Santa Clara, Calif.-based XenoPort isn't one of them.
The company, which had about $125 million in the bank as of Sept. 30, had enough funding, prior to the latest offering, to cover operational expenses through the second quarter of 2010, said company spokeswoman Jackie Cossmon.
But it wasn't about to turn down a funding opportunity, especially in such a tough financing environment.
"We had two investors who came to us independently and were interested" in buying shares of the company, Cossmon told BioWorld Today. "Given the market conditions, we looked at this as an opportunity to change our cash position," and to extend the firm's runway "through the second quarter of 2011."
Funds affiliated with Maverick Capital and Venrock agreed to purchase nearly 1.9 million shares of stock, plus warrants to buy 283,420 shares, priced at $21.17 per unit - each unit consisting of one share and one warrant to buy 0.15 of a share - for net proceeds to the company of about $39.7 million.
Those funds are expected to support general corporate purposes, including ongoing clinical development of its product pipeline. XenoPort is moving ahead with XP19986, a transported prodrug of the R-isomer of baclofen, which is in Phase II in gastroesophageal reflux disease (GERD) and spasticity.
Early this month, the company reported that the drug missed its primary endpoint of significantly reducing symptoms of GERD in one Phase II study. But a subgroup analysis indicated that XP19986 monotherapy was effective in reducing heartburn in patients with GERD who previously had responded to proton-pump inhibitors and XenoPort plans to conduct a further study in the next year. (See BioWorld Today, Dec. 3, 2008.)
The company also expects to initiate a clinical study of XP19986 in acute back spasms, Cossmon said.
Earlier in development, XenoPort is working on XP21279, a transported prodrug of levodopa, for Parkinson's disease. That product is in Phase I testing "with two different formulations," Cossmon said, adding that data are expected in the first quarter of 2009.
Meanwhile, partner GSK intends to refile the application for Solzira in RLS next month, Cossmon said.
The London-based pharma firm originally filed the NDA in September, based on data from three Phase III studies showing that the drug effectively treated symptoms of RLS, a condition characterized by burning, creeping, tugging or tingling sensations in the legs that forces movement to alleviate discomfort and often disrupts sleep. But the application was withdrawn in November due to filing issues; GSK and XenoPort assured investors that the withdrawal was not related to the filing's content. (See BioWorld Today, Sept. 17. 2008, and Nov. 11, 2008.)
If approved, Solzira, a transported prodrug of gabapentin, would be the first gabapentin product for RLS, which is believed to affect about 12 million people in the U.S.
Existing drugs Requip (ropinirole, GSK) and Mirapex (pramiprexole, Boehringer Ingelheim GmbH) both target the dopamine receptor.
Additional trials of Solzira (also known as XP12512) are ongoing in postherpetic neuralgia and painful diabetic neuropathy. It also is being studied as a prophylaxis in migraine.
GSK holds the co-development and commercialization rights to Solzira for all regions, except Japan and five other Asian countries, under a 2007 deal valued at up to $640 million. XenoPort partnered the drug in Japan and the Asian territories with Tokyo-based Astellas in a 2005 agreement worth about $85 million. (See BioWorld Today, Dec. 2, 2005, and Feb. 9, 2007.)
Shares of XenoPort (NASDAQ:XNPT) gained $1.53 Tuesday, to close at $23.13.
In other financings news:
? International Stem Cell Corp., of Oceanside, Calif., said it received the first $1 million tranche of an anticipated private equity financing of up to $5 million to be funded over the next several months. The financing is in the form of convertible preferred stock. Funding of future tranches is subject to various contingencies. The total amount of the financing is intended to allow the firm to retire its existing secured debt and to fund operations as its moves forward with preclinical studies in early 2009. The company is developing technology to create pluripotent stem cell lines from unfertilized human eggs for use in minimizing immune rejection after transplantation. The firm's stock (OTC BB:ISCO) fell 1 cent Tuesday to close at 19 cents. n
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