Vivus Adds $45.8M Ahead of Planned Qnexa Resubmission
Mountain View, Calif.-based Vivus Inc. priced a registered direct offering of 6.9 million shares at $6.65 each for gross proceeds of $45.8 million to boost its balance sheet and support ongoing work with obesity drug Qnexa (phentermine/topiramate), including the resubmission of a new drug application (NDA) expected next quarter.
The company, which received a complete response letter (CRL) last year raising questions about the risk of birth defects linked to component topiramate, is finishing up a retrospective observational study dubbed FORTRESS, which is looking at fetal outcomes of offspring of women exposed to topiramate. Last month, Vivus reported top-line data from a separate retrospective study showing no statistically significant differences in the incidence of oral clefts or major congenital malformations associated with topiramate exposure in utero compared to control.
Yet even if the FORTRESS study indicates higher-than-acceptable risk, Vivus said earlier this year that it would still seek approval of Qnexa, just on a more limited basis – for men and women of nonchild-bearing potential. (See BioWorld Today, May 4, 2011.)
Vivus' drug was one of the big three obesity drugs rejected by the FDA in the past year and, despite the questions raised regarding topiramate, Qnexa might have the best chance going forward.
San Diego-based Arena Pharmaceuticals Inc. is working to address issues relating to a carcinogenicity study in rats that delayed approval of lorcaserin, a 5HT2C receptor agonist. Arena recently reported data from a Pathology Working Group, which reviewed female rat mammary tumor diagnoses from a two-year study and found that the number of malignant tumors increased with high-dose lorcaserin but not with low-dose or mid-dose.
Those and other findings will be submitted to the FDA, and Arena has said it hopes to refile the NDA around the end of this year.
Bigger questions remain for San Diego-based Orexigen Therapeutics Inc.'s Contrave, which had looked like the most promising contender last year after earning a thumbs-up from the FDA's Endocrinologic and Metabolic Drugs Advisory Committee, but ended up with a surprise CRL early this year. The agency asked for a new trial to study cardiovascular effects, and Orexigen has since cut 40 percent of its staff and continues to evaluate its options. (See BioWorld Today, Feb. 2, 2011.)
Vivus also is seeking approval of Qnexa in Europe. The firm filed a marketing authorization application in December, but heard back from the EMA's advisory agency with concerns similar to the FDA's. It has requested a meeting next month to help prepare a response, also anticipated in the fourth quarter.
Should Vivus' Qnexa hit another regulatory roadblock, the firm still has erectile dysfunction (ED) drug avanafil, which is under FDA review. The ED market is already crowded with other PDE5 inhibitors such as Pfizer Inc.'s Viagra (sildenafil) and Eli Lilly and Co.'s Cialis (tadalafil), but Vivus is hoping avanafil's quicker onset could help carve out a piece of the market.
And makers of all branded ED drugs got some good news earlier this week. New York-based Pfizer succeeded with a method-of-use defense for its patent for Viagra, which will keep a generic version off the market until 2019. The drug's main ingredient was set to lose patent protection in 2012. A cheaper generic would have made it tough for branded drugs to compete.
Vivus' latest financing, which was priced at a 6.3 percent discount to Monday's closing price, will result in net proceeds of about $45.3 million. That funding adds to the $121.6 million in the bank as of June 30, and is expected also to support manufacturing work, clinical trials and general corporate purposes and working capital.
The firm, which posted a net loss of $16.2 million, or 20 cents per share, for the second quarter, expects to have about 88.9 million shares outstanding following the offering.
Shares of Vivus (NASDAQ:VVUS) gained 5 cents to close Tuesday at $7.15.
In other financings news:
Mirna Therapeutics Inc., of Austin, Texas, closed a $1.5 million equity round. Participation came from several existing shareholders and proceeds will be used to further development of the company's microRNA therapeutics in cancer. The funding, along with about $15.3 million in grant money from Texas-based initiatives, are expected to help the firm complete preclinical work toward submission of an investigational new drug application by the end of 2012.
Spinifex Pharmaceuticals Pty. Ltd., of Victoria, Australia, closed a A$6.25 million (US$6.58 million) expanded Series B round with investments from GBS Venture Partners, Brandon Capital, Uniseed and UniQuest. That brings the company's total Series B funding to A$18.25 million. Spinifex said proceeds will be used to support development of pain management candidate EMA401, including two Phase II studies in peripheral nerve injury patients and cancer chemotherapy patients. Those studies are expected to run in parallel with two planned Phase II studies in postherpetic neuralgia. EMA401 is an angiotensin Type II receptor antagonist.
Thetis Pharmaceuticals LLC, of Rocky Hill, Conn., raised $1.5 million in seed funding, which included a $500,000 investment from Connecticut Innovations, as well as participation from Stonehenge Partners and angel investors. Thetis is developing drugs for diabetes and its lead product TP101 is designed to combine metformin and the principal component from omega-3 polyunsaturated fatty acids. It anticipates starting clinical trials of TP101 in Type II diabetes next year.
Published: August 24, 2011
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