Prometic Life Sciences Inc., of Laval, Quebec, will earmark a portion of the proceeds from a $10 million financing from Thomvest Seed Capital Inc. to commission its GMP facility for manufacture of plasma-derived orphan drugs.
The financing will take the form of a long-term loan secured by Prometic’s assets, except for its patent portfolio.
Prometic’s pipeline includes PBI-4050, a candidate for fibrosis with proof-of-concept data showing activity in kidney, heart, lung and liver.
Frederic Dumais, director of communications and investor relations for Prometic, said the company reviewed a number of different financing options. “For this one, the financing terms were quite favorable,” Dumais told BioWorld Today. “We don’t have to repay either capital or interest during the five-year term. It provides working capital for the next five years for the company.”
Dumais also said that the lender viewed the financing as an opportunity to help an up-and-coming company create value in its industry.
Prometic granted Thomvest a warrant to purchase 1 million shares of common stock at $0.52 per share for a term of eight years. It also gave Thomvest a second warrant that is exercisable upon payment of $15.6 million, or cancellation of Prometic’s loan repayment obligation, for common shares equal to $15.6 million divided by the quotient of $461 .6 million divided by the number of outstanding shares, on a fully diluted basis, at the close of business on the exercise date. The term for the second warrant is five to eight years, depending on capitalization milestones.
The GMP facility in which Prometic intends to invest is a former Glaxosmithkline plc facility that was used to manufacture a H1N1 vaccine, according to Dumais. The company took a long-term lease of the facility, and is retrofitting it to produce proteins from its plasma fractionation technology.
“We’ll be able to extract proteins from plasma in order to bring them to market,” Dumais said. “We do not own the facility, but we are investing in retrofitting to accommodate our needs.” He said that Prometic has already invested about $4 million in the facility.
Prometic’s platform, the Plasma Protein Purification System (PPPS) was originally developed by the American Red Cross. It offers a yield advantage for production of common proteins such as coagulating factors for hemophilia, plasminogen, fibrinogen and albumen ranging from 40 percent to 170 percent.
The company has carried out activities enabling an investigational new drug application for its anti-fibrotic drug candidates. Fibrosis is a disorder in which organs gradually lose function due to deposit of fibrous material. It presented data at the 2013 European Respiratory Society annual congress in Barcelona, Spain, showing that PBI-405 compared favorably to pirfenidone in pulmonary fibrosis. It significantly reduced scarring in the lungs in animal studies, and generated reduction of fibrosis, resulting in significant improvement in organ function.
The company recently received orphan drug designation for its plasma purified human plasminogen drug for treatment of hypoplasminogenemia, or Type I plasminogen deficiency (T1PD). It is developing a systemic formulation of the drug in partnership with Hematech Biotherapeutics Inc., of Taipei, Taiwan.
It achieved its first milestone related to that product in December 2012, collecting a $1 million milestone from its partner. The milestone was part of an overall potential $10 million drug licensing and development agreement signed in May 2012. It expects another $4 million in milestones from that agreement over the course of the next 12 to 15 months.
Regarding the lender, Thomvest Seed Capital, Dumais said it is the investment arm of one of the wealthiest families in Canada, and that the group is recognized as being investors in companies that have the potential to bring about transformational changes to the industry. “On that front, it’s validation of the advantages provided by our technology. We’re pretty glad about that,” Dumais said.
In other financings news:
• Axogen Inc., of Alachua, Fla., said the underwriters of its recent public offering of common stock have exercised their option to purchase an additional 184,332 shares. The total gross proceeds to Axogen from the offering, including from the exercise of the overallotment option, are expected to be $18.6 million. The company plans to use the net proceeds to expand product commercialization and marketing efforts for their portfolio of peripheral nerve repair products (Avance Nerve Graft, AxoGuard Nerve Connector and AxoGuard Nerve Protector) and continue its product pipeline development.
• Cubist Pharmaceuticals Inc., of Lexington, Mass., closed its offering of $800 million aggregate principal amount of convertible senior unsecured notes in two series: $350 million aggregate principal amount of 2018 notes and $450 million aggregate principal amount of 2020 notes. The 2018 notes bear interest at a rate of 1 . 125 percent per year and the 2020 notes bear interest at a rate of 1.875 percent, in each case, payable on March 1 and Sept. 1 of each year, beginning March 1, 2014. The net proceeds from the offering were approximately $776 million.
• Kahr Medical Ltd., of Jerusalem, a portfolio company of Hadasit Bio-Holdings, is raising $2.5 million of which $1.65 million will be invested by Flerie Invest AB, a company controlled by Thomas Eldered, co-owner of Recipharm. Sanofi will maintain its current holdings with an investment of $500,000 and Hadasit Bio will invest an additional $200,000. An additional $150,000 will be offered as a one-year option to Flerie and Hadasit Bio. Kahr is developing their Signal Converter Proteins (SCP) technology platform, which allows the construction of protein-based drugs with two functional sides. Two lead products, KAHR-101 and KAHR-102, are in pre-clinical development toward treatment of several cancers and autoimmune diseases and are expected to enter clinical trials next year.
• Protalix Biotherapeutics Inc., of Carmiel, Israel, said it intends, subject to market conditions, to offer and sell $60 million principal amount of its convertible notes due 2018 through a private offering. The company expects to grant the initial purchaser an option to purchase up to an additional $9 million principal amount of notes, exercisable for 30 days after the pricing date of the notes offering.
• Sagent Pharmaceuticals Inc., of Schaumburg, Ill., said it has upsized a planned registered offering from 4.44 million to 4.6 million shares of its common stock priced at $21 .25 per share. The underwriters also receive a 30-day option to purchase up to an additional 690,000 shares of common stock, all at the public offering price less the underwriter’s discount. The offering is expected to close Sept. 16.
• Stellar Biotechnologies Inc., of Port Heuneme, Calif., said it completed the initial closing of its private placement, which included brokered and non-brokered portions, raising initial gross proceeds of $10 million. The non-brokered portion includes a $5 million investment by Amaran Biotechnology Inc., a privately-held Taiwan biotech company and biopharmaceuticals contract manufacturer.