With an inhibitor of the Trk family of receptor tyrosine kinases in phase I, Loxo Oncology Inc. priced an upsized initial public offering (IPO) of about 5.2 million shares at $13 each, raising about $67.6 million for an effort to come up with a best-in-class compound.

Stamford, Conn.-based Loxo boosted the number of shares from 4.4 million originally sought, and sold at the midrange of the hoped-for price, $12 to $14. Shares (NASDAQ:LOXO) closed flat Friday at $13.

Loxo said it believes Trk may help the process of translocations, or the abnormal fusions of two genes that can lead to activation of a signaling pathway, and from there to cancer. Other genes involved in lung and Spitz tumor translocations include ALK, RET and ROS1 – all susceptible to clinical responses with other drugs in lung cancer trials with other drugs.

The lung cancer space has been particularly good for therapies that take aim at ALK-translocated tumors, as well as EGFR-mutant ones. To find out if Trk works the same way, Loxo will partner with diagnostic firms as a way of sorting patients. Trk may be mutated in lung, colon and endometrial tumors.

Loxo made news last October by flipping the usual, venture-backed approach, pulling down a series A financing of $33 million only after sealing a $434 million deal with Boulder, Colo.-based Array Biopharma Inc. to advance a preclinical candidate developed by Loxo, as well as to find more small-molecule drugs for oncology targets.

The first money was intended to fund proof-of-concept research and push another candidate into the clinic over the next three years or so, but Loxo was mum about details at the time. Series A participants included founding investor Aisling Capital and new investors Orbimed Advisors LLC plus a an undisclosed entity. In May, the series B round of $24 million followed. (See BioWorld Today, July 11, 2013, Oct. 4, 2013, and May 7, 2014.)

In the IPO, Loxo granted the underwriters a 30-day option to buy as many as 789,230 more shares to cover overallotments, if any. At the same time, the firm is selling through a private placement 230,769 shares of its common stock to New Enterprise Associates 14 LP, an existing stockholder, for the same price as the IPO shares.

Cowen and Co. LLC and Stifel are acting as joint book-running managers for the offering, with JMP Securities LLC and Oppenheimer & Co Inc. serving as co-managers.

In other financing news:

Celladon Corp., of San Diego, entered a credit facility with Hercules Technology Growth Capital Inc. and its affiliate lenders. The credit facility provides for up to $25 million of loans. Celladon drew a first tranche of $10 million at the closing of the new credit facility. A second tranche of up to $15 million can be drawn, at Celladon's option, before May 31, 2015. This option may be exercised if data from the ongoing phase IIb trial of Mydicar supports the continued development of its breakthrough indication to either a phase III study or registration for approval, as determined by Celladon's senior management and board. Mydicar, a genetically targeted enzyme replacement therapy intended to restore levels of SERCA2a, has received breakthrough designation from the FDA for reducing hospitalization for heart failure in Nab-negative NYHA class III or class IV heart failure patients who are not in immediate need of a left ventricular assist device or heart transplant. Celladon expects to report results from the phase IIb trial in April 2015.

Fate Therapeutics Inc., of San Diego, completed a long-term debt financing of up to $20 million with Silicon Valley Bank. The company has drawn down $10 million, at a fixed interest rate of 6.9 percent, under the first tranche of the debt facility. Fate is enrolling patients in its phase II PUMA study, a randomized, controlled trial that is designed to assess the efficacy and safety of Prohema (16, 16-dimethyl prostaglandin E2, or dmPGE2, modulated cord blood) in adult patients undergoing hematopoietic stem cell transplantation for the treatment of hematologic malignancies.

Otonomy Inc., of San Diego, set the terms for its initial public offering, aiming to raise $80 million via the sale of 5.3 million shares at a price range of $14 to $16 each. Proceeds would be used to support a new drug application and commercialization efforts for lead product, Auripro, a sustained-exposure version of ciprofloxacin that recently met its endpoints in a pair of phase III studies in pediatric patients with bilateral middle ear effusion requiring tympanostomy tube placement. (See BioWorld Today, July 9, 2014, and July 15, 2014.)

Prometic Life Sciences Inc., of Laval, Quebec, secured a follow-on investment from Thomvest Seed Capital Inc., the Toronto-based investment vehicle of Peter Thomson, consisting of a $20 million loan. As partial consideration for the loan, Prometic has granted Thomvest about 16.7 million warrants with an exercise price of $1.87 per common share, a premium of 52 percent to the previous day's closing share price. Prometic will use part of the proceeds for the development and manufacture of additional and existing plasma-derived orphan drugs, the advancement of the ongoing PBI-4050 clinical program as well as the repayment of secured debt provided by certain shareholders.

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