Associate Managing Editor

CV Therapeutics Inc., adding to a line of biotech companies seeking (and getting) funding through debt financings, agreed to sell $100 million aggregate principal amount of 2 percent senior subordinated convertible debentures.

The company agreed to a private placement with qualified institutional investors for the debentures, which are due 2023. It expects to close the transaction Wednesday. Initial purchasers have a 30-day option to buy another $25 million in debentures.

The company may redeem all or a portion of the debentures at any time after May 16, 2006. Also, holders have the right to require the company to purchase all or a portion of the debentures on May 16, 2010; May 16, 2013; and May 16, 2018. The debentures will be convertible by holders only during certain time periods and under certain circumstances into shares of common stock at an initial conversion rate of 21.0172 shares of common stock per $1,000 principal amount of debentures, although that is subject to adjustment in certain circumstances and represents an initial conversion price of $47.58 per share.

CV Therapeutics said it would use a portion of the funds for an escrow account to provide security for the first six scheduled interest payments on the debentures. Remaining funds would be used for general corporate purposes, it said.

CV Therapeutics' stock (NASDAQ:CVTX) closed Thursday at $35.54, before the news was released. It dropped $1.11 Friday to close at $34.43.

The company closed the first quarter with cash, cash equivalents and marketable securities of $410.3 million. It posted a net loss of $20.7 million for the period ended March 31, down from about $21.9 million in the first quarter of 2002.

CV Therapeutics, of Palo Alto, Calif., has four compounds in clinical trials. Ranexa (ranolazine) is designed to partially inhibit fatty acid oxidation. The company filed for approval in chronic angina in December and if approved, Ranexa would become the first new class of anti-anginal therapy in more than 20 years, CV said. (See BioWorld Today, Dec. 31, 2002.)

Tecadenoson (CVT-510), an A1-adenosine receptor agonist, is being developed for the reduction of rapid heart rate during atrial arrhythmias. One Phase III trial has been completed, with positive results. (See BioWorld Today, Nov. 21, 2002.)

CVT-3146, a selective A2A-adenosine receptor agonist, is being developed for use as a pharmacologic stress agent in cardiac perfusion imaging studies. The compound has provided positive results in a Phase II study. Adentri, an A1-adenosine receptor antagonist for the potential treatment of acute and chronic congestive heart failure, is licensed to Biogen Inc., of Cambridge, Mass.

The Nasdaq Biotechnology Index (NASDAQ:NBI) hit its 2003 low point on Feb. 13, closing the day at 467.46. Since then, it has been on a slow but persistent rise, closing June 12 at 742.78. Positive trial data have driven most of it, boosted by the well-received American Society of Clinical Oncology meeting, which began in late May and was held in Chicago. The rise in stock prices and investor buzz for biotech is pushing companies to capitalize on rising stock prices or the promise of a better future.

The last seven days alone featured EpiGenesis Pharmaceuticals Inc., of Princeton, N.J., raising $23 million in a Series A round; Corixa Corp., of Seattle, announcing its plans to raise $105 million through both a subordinated notes offering and a private placement; VaxGen Inc., of Brisbane, Calif., raising $7 million; QuatRx Pharmaceuticals Co., of Ann Arbor, Mich., raising $28 million in a Series C financing; OxiGene Inc., of Watertown, Mass., raising $15 million privately; Guilford Pharmaceuticals Inc., of Baltimore, planning a $50 funding through subordinated convertible notes; NPS Pharmaceuticals Inc., of Salt Lake City, seeking $125 million in convertible notes; and Durect Corp., of Cupertino, Calif., proposing a $50 million convertible note offering.