Clinical Data Inc. is adding $66 million through a public offering to help fund ongoing Phase III development of Vilazodone in depression.
The Newton, Mass.-based firm is selling 3 million shares priced at $22 each, and said most of those will be purchased by Randal Kirk, the company's chairman and largest shareholder. Kirk agreed to buy, through one or more of his affiliates, 2.25 million shares - or $49.5 million worth of stock - which would give him about a 48 percent stake in Clinical Data.
The company also offered underwriters Bear, Stearns & Co. Inc. and Lazard Capital Markets a 30-day option to purchase an additional 450,000 shares. If that option is exercised in full, Clinical Data would have about 13.5 million outstanding shares following the offering, expected to close on or about July 23, 2007.
Net proceeds are expected to total about $62 million, or $71 million with overallotments, and, according to the company's SEC filing, will be used to support late-stage work on Vilazodone, a small molecule designed to act as both a serotonin reuptake inhibitor and a 5HT1A partial agonist. The company is wrapping up its first Phase III study, which finished enrolling 410 patients in March, with results expected later this quarter. A second Phase III study and a long-term safety study likely will be required before a new drug application submission, which could come as early as the end of 2009.
Vilazodone is the company's sole therapeutic. It was picked up in the October 2005 acquisition of New Haven, Conn.-based Genaissance Pharmaceuticals Inc. Genaissance previously had licensed the product from Darmstadt, Germany-based Merck KGaA, which is entitled to milestones and royalties upon successful development.
The ongoing Phase III trial includes pharmacogenetic analyses for biomarker response to Vilazodone, which Clinical Data anticipates using to develop a companion genetic test to determine each individual patient's response to treatment.
A larger part of Clinical Data's business involves creating and using genetic tests and biomarkers to predict drug safety and efficacy. The company has five genetic tests on the market, including the Familion family of tests designed to detect mutations in five ion channel genes associated with cardiac channelopathies or rare, potentially lethal heart conditions. Clinical Data also markets its PGxPredict tests, including one that aims to determine a patient's likelihood of response to rituximab (Rituxan, Genentech Inc. and Biogen Idec Inc.) in follicular, CD20-positive B-cell non-Hodgkin's lymphoma.
Vilazodone and the genetic test development are conducted in Clinical Data's PGxHealth division. The company has two additional business divisions: the Cogenics division that provides molecular and pharmacogenomics services to research and regulated environments, and the Vital Diagnostics business, which offers in vitro diagnostics solutions for clinical laboratories.
The company anticipates using remaining funds from the offering for general corporate purposes, including the acquisition of complementary businesses and technologies, as well as for capital expenditures and working capital.
The company had about $17 million in cash and cash equivalents as of June 18.
Shares of Clinical Data (NASDAQ:CLDA) closed at $21.20 Wednesday, down $1.64.
In other financings news:
• Elite Pharmaceuticals Inc., of Northvale, N.J., sold the remaining 5,000 authorized shares of its Series C preferred stock, resulting in gross proceeds of $5 million. The shares were priced at $1,000 per share and initially will be convertible at $2.32 into 431 shares of common stock. Each purchaser also received a warrant to purchase additional shares of common stock. Oppenheimer & Co. Inc. served as the lead placement agent. A specialty pharmaceutical company, Elite develops oral, controlled-release products.
• Sucampo Pharmaceuticals Inc., of Bethesda, Md., set the terms for its initial public offering at 3.8 million shares priced between $14 and $16, which would bring in proceeds of $57 million at the midpoint. The firm, which develops drugs based on prostones, filed for an offering in June, hoping to raise $86 million. Upon pricing the offering, Sucampo would trade on Nasdaq under the ticker "SCMP." Cowen and Co., CIBC World Markets and Leerink Swann & Co. are serving as underwriters. (See BioWorld Today, June 21, 2006.)