Restorgenex Corp., a public specialty biopharma built from four small biotechs on the shell of a defunct sports and entertainment promoter, has closed the fifth and final round of a $35.6 million private placement.
Proceeds of the financing will support continued development and early stage trials testing the company's lead dermatology and opthalmology candidates and advancement of its women's health programs. Its four lead indications are acne, hirsutism, keloid scarring and age-related macular degeneration (AMD), with vaginal atrophy trailing close behind, CEO Stephen Simes told BioWorld Today.
Prior to its transformation into Restorgenex, the bulletin board-listed vehicle that gave the company access to the public market, Stratus Media Group Inc., organized sporting events, ran a credit card rewards program and even inked network TV deals for mixed martial arts events.
Today, the company has traded cage matches for clinical trials as it moves to advance its dermatology candidates and experimental opthalmology therapy into phase I and phase II testing next year, as well as preparing for its planned move to Nasdaq.
Following two phase I trials that established the safety of P529, its nonsteroidal, synthetic, small-molecule inhibitor of PI3 kinase, mTORC1/mTORC2 and Akt, it's now planning to test the drug in phase II trials for AMD in the first half of 2015. Acquired by way of Paloma Pharmaceuticals Inc., the company said P529's capacity to inhibit vascular permeability may make it a great companion therapy for Lucentis (ranibizumab, Roche AG/Novartis AG), with potential to help people who become unresponsive to the blockbuster after repeated dosing.
In the dermatology space, the company also is planning a phase I/II trial for P529 for the treatment of keloid scarring/hypertrophic scarring in the first quarter of 2015.
Extending its dermatology pipeline, Restorgenex is developing two synthetic molecules in-licensed from Yale University by way of Hygeia Therapeutics Inc. Engineered to avoid adverse systemic interactions, the molecules may also provide a safety profile superior to currently marketed hormone-based therapies. The molecules, called "soft" hormones and intended for topical application, include a soft anti-androgenic candidate, RES-440, and a soft estrogenic candidate, RES-102.
RES-440, the soft anti-androgenic molecule, will go up against acne in a combined phase I/II trial starting in second quarter 2015. The drug also has potential application in treating hirsutism, also known as unwanted hair, and thinning hair, also known as alopecia.
Vaginal atrophy, the lead indication for the company's soft estrogen, RES-102, offers another big opportunity due to the potential dangers of systemic absorption of estrogen through the vaginal lining in existing products, an issue that Simes said Restorgenex thinks it can avoid while providing a systemic safety advantage through its unique chemistry. Restorgenex plans to launch a combined phase I/II trial in that indication in the third quarter of 2015.
"Even though we're looking at nice targeted indications, these are rather large markets," Simes said. Given its lineage and connections, the company is likely to find plenty of allies as it moves to develop its pipeline.
Celgene Corp. founder and Restorgenex Chairman Sol Barer and famed biotech investor Isaac Blech recruited Simes for his experience managing clinical programs in a public company over the long term, skills he had gained as CEO of Biosante Pharmaceuticals Inc., a company he left following its 2013 merger with ANI Pharmaceuticals Inc.
With just seven employees, Restorgenex is still small. Among the key figures in the start-up are Yael Schwartz, a veteran of Sepracor Inc. and founder of the soft hormones specialist Canterbury that's now part of Restorgenex; David Sherris, founder of both Paloma and of the Restorgenex's fourth subsidiary, Vasculomedics Inc., now part of the company's below-the-radar zinc finger portfolio; and Chief Financial Officer Phillip Donenberg, who served beside Simes at Biosante.
Backed by Barer, Blech and Ally Bridge Group, which participated in the placement, the company will have no problem funding its plans, Simes said. But he acknowledged that figuring out how to focus with so many product opportunities is a trick. "It's a lot of opportunity for a small company." he said. "One of the critical parts of a company like this is focus and we plan on being well focused."
Restorgenex's shares (OTC:RESX) closed at $3.98 Tuesday.
In other financings news:
Amcure GmbH, of Eggenstein-Leopoldshafen, Germany, a spin-off from the Karlsruhe Institute of Technology, said it closed a series A financing totaling €5 million (US$6.8 million). The funding, which comes from a consortium headed by LBBW Venture Capital, with participation from KfW, MBG Mittelstaendische Beteilingungsgesellschaft Baden-Wuerttemberg, S-Kap Beteiligungen Pforzheim, Biom AG and private investors, will be used to continue development of product candidates for treating metastasizing tumors. Amcure's series of candidates are designed specifically to bind to a special isoform of surface molecule CD44 and to interfere with central signaling pathways in tumor growth.
Bioblast Pharma Ltd., of Tel Aviv, Israel, set terms for its initial public offering, seeking to raise $40 million by offering 3.3 million shares in a range of $11 to $13 apiece. Founded in 2012, the company plans to list on Nasdaq as ORPN. Oppenheimer and Roth Capital are joint bookrunners on the deal. (See BioWorld Today, Feb. 1, 2014.)
Innocoll AG, of Athlone, Ireland, set terms for its initial public offering, seeking to raise $75 million by offering 5.4 million American depository shares in a range of $13 to $15 apiece. Founded in 1997, the company plans to list on Nasdaq as INNL. Innocoll said proceeds will be used to advance the development of its collagen-based candidates, Xaracoll, Cogenzia and Collaguard. In its F-1 filing, the company reported approximately €923,000 (US$1.25 million) in cash as of March 31. Piper Jaffray and Co. and Stifel, Nicolaus and Co. are joint bookrunners on the deal.
Stemcells Inc., of Newark, Calif., said it plans to offer approximately 11.3 million common shares and short-term warrants to purchase up to approximately 9.6 million additional shares to two institutional biotechnology investors, subject to market and other conditions, for gross proceeds of $20 million. The shares and warrants will be sold in units, each consisting of one common share and a warrant to purchase 0.85 of an additional share at $1.77 per unit. The warrants, which may be exercised six months from the date of issue at an initial price of $2.17 apiece, will expire 13 months from the date of issue. Stemcells said proceeds from the offering, expected to close by July 18, will be used for general corporate purposes. Ascendiant Capital Markets LLC is acting as placement agent.
Tribute Pharmaceuticals Canada Inc., of Milton, Ontario, closed its public offering of units with a syndicate of underwriters led by Dundee Securities Ltd. and including Mackie Research Capital Corp. The offering consisted of approximately 42.9 million units, including the full exercise of approximately 5.6 million units to fill overallotments. Each unit consisted of one common share and a warrant to purchase one-half of one common share at 70 cents per unit, generating gross proceeds of approximately $30 million. Each warrant may be exercised to acquire one common share at 90 cents for up to 24 months following the date of issue. Tribute said proceeds will be used for acquisitions and licenses of health care products and/or companies that complement its specialty pharmaceutical portfolio. Bloom Burton & Co Inc. and Bayfront Capital Partners Ltd. acted as selling group members.