A little more than a month after reporting positive data from the first of two pivotal trials testing antibiotic tedizolid phosphate in Gram-positive skin infections, Trius Therapeutics Inc. is shoring up its cash balance with a $45.2 million public offering.

The San Diego-based firm priced 8.6 million shares at $5.25 apiece, a 9.3 percent discount to Wednesday's closing price. Proceeds are expected to fund general corporate purposes, including the ongoing second pivotal trial of tedizolid in skin infections, anticipated to report top-line data in early 2013. Trius also could start pivotal testing in a second indication, hospital-acquired pneumonia (HAP).

Shares of Trius (NASDAQ:TSRX) fell 42 cents to close Thursday at $5.37, likely due to the dilution, as well as to reports that the SEC was investigating the firm's past earnings statements.

Still, Thursday's closing price is only slightly above the firm's initial public offering price in 2010, despite the promising results to date from late-stage testing of tedizolid.

Data from the first Phase III trial in acute bacterial skin and skin structure infections (ABSSSI), dubbed TR701-112, showed oral tedizolid hit its noninferiority endpoint against Zyvox (linezolid), an antibiotic from Pfizer Inc. that, in 2010, grabbed the biggest share of the $1 .5 billion-plus Gram-positive infection market. But Zyvox could go generic as early as 2015, which could explain Wall Street's nonreaction last month, even though Trius has emphasized tedizolid's more convenient dosing schedule – once daily for six days vs. twice daily for 10 days for Zyvox treatment – and better side-effect profile. (See BioWorld Today, Dec. 20, 2011.)

A second pivotal trial is similarly designed – comparing the drug to Zyvox by looking at the cessation of infected lesion spread and absence of fever at 48 to 72 hours following initiation of treatment – but will involve the transition of intravenous (I.V.) to oral dosing of tedizolid.

Trius secured special protocol assessments for both trials, which should give investors a measure of comfort despite the ever-shifting guidance for antibiotic drug development. (See BioWorld Today, June 17, 2010.)

For now, the small biotech retains U.S. and European rights to the drug, but it partnered Asian and emerging markets rights last year in a deal with Bayer AG, of Leverkusen, Germany. Trius banked $25 million up front and booked a $5 million milestone payment this month for completion of the first positive Phase III trial. It could earn up to another $64 million in milestones, plus double-digit royalties. (See BioWorld Today, May 27, 2011.)

On top of that, Bayer is picking up about 25 percent of the development costs for global approval of tedizolid.

Besides ABSSSI, tedizolid also has been tested in hospital-acquired pneumonia (HAP). Trius reported in its SEC filing that it had completed a Phase I study showing the drug successfully penetrated the lung. Pivotal trials in HAP could begin this year.

A second-generation oxazolidinone, tedizolid is designed to improve upon Zyvox, currently the only available drug for methicillin-resistant Staphylococcus aureus (MRSA) that is available in both I.V. and oral formulations, an advantage that has allowed it to remain competitive against newer MRSA drugs such as Cubicin (daptomycin, Cubist Pharmaceuticals Inc.) Zyvox also, at least so far, fared better against resistance, which gives it a leg up against Vancocin (vancomycin, ViroPharma Inc.) and early studies have shown that Trius' drug might be even less prone to resistance.

Though Trius was one of the first firms to recover from the regulatory shifts in the antibiotic space, other firms also are forging ahead, such as Durata Therapeutics Inc., which is in pivotal testing in ABSSSI with dalbavancin, an intravenous lipoglycopeptide.

Before the latest offering, Trius had said its $70 million in cash as of Sept. 30, 2011, should take the firm into the fourth quarter of this year, assuming the company had launched the two planned HAP trials. Proceeds from the public offering would give the firm more than $100 million in the bank. Another $6.8 million could be added if underwriters Citigroup, Piper Jaffray & Co., Canaccord Genuity Inc. and Ladenburg Thalmann & Co. Inc. exercise their 1.29 million share overallotment option in full.

The offering is set to close on or about Jan. 31. Prior to the offering, Trius had about 28.6 million shares outstanding.

In other financings news:

• Cel-Sci Corp., of Vienna, Va., is raising about $5.76 million through the sale of 16 million shares of common stock priced at 36 cents per share in a registered direct offering. The investor also will receive warrants to purchase 12 million shares. Proceeds are expected to support general and administrative expenses, as well as the company's Phase III trials of cancer drug Multikine (leukocyte interleukin). Shares of Cel-Sci (AMEX:CVM) fell 8 cents, or 17.7 percent, to close at 35 cents Thursday.

• Pacgen Biopharmaceuticals Corp., of Vancouver, British Columbia, said it completed its private placement of about 5.4 million common shares at $0.0558 each to CurieMed Corp. for gross proceeds of $300,000. Following the placement, CurieMed and its parent company, General Biologicals Corp., will own about 20.38 percent of the company.