Halozyme Therapeutics Inc. raised $32.1 million, accepting the investment offer from its largest shareholder.
The San Diego-based company, which has a platform based on human hyaluronidase, now has more than $100 million in the bank and a stock price that briefly climbed over $10 Tuesday. On Dec. 5, the stock was trading at $2.85 and the company had about $15 million in cash.
Halozyme's stock (AMEX:HTI) gained $1.02 Tuesday, or 11.4 percent, to close at $9.97.
New River Management V LP agreed to purchase 3.5 million shares of Halozyme at $9.17 per share, a premium of 22 cents to the price on the day the deal was made, Halozyme said. New River is an investment fund affiliated with Halozyme's largest shareholder, Randal Kirk.
The investment increased New River's stake in Halozyme to about 14.5 percent of the now-75 million outstanding shares, said Jonathan Lim, president and CEO of Halozyme. Kirk was the founder, chairman and CEO of New River Pharmaceuticals Inc., of Radford., Va., and owned 50.2 percent of that company. Last week, Shire plc, of Basingstoke, UK, completed its all-cash $2.6 billion acquisition of New River.
"He approached us with an offer to invest more in the company," Lim told BioWorld Today. "We see this as a tremendous show of confidence by our largest shareholder. [Kirk] has an incredible track record of making shrewd investments over his career."
In addition to New River, Lim said, Kirk was an investor in Scios Inc., which in 2003 was acquired by Johnson & Johnson for $2.4 billion in cash.
"We plan to use some of the proceeds to accelerate development of our own products," said Lim, whose firm recently completed significant licensing deals with Baxter Healthcare Corp., of Deerfield, Ill., and F. Hoffmann-La Roche Ltd., of Basel, Switzerland. "We are excited about pursuing our long-term strategy to grow this into a great company."
The company's Halozyme recombinant hyaluronidase product Hylenex was approved by the FDA in 2005 for use to increase the absorption and dispersion of other injected drugs, as well as for use in other indications. Baxter, which gained further rights to the technology in an expanded deal in February, is expected to launch the product this quarter, Lim said. Halozyme is entitled to royalties on sales. (See BioWorld Today, Feb. 15, 2007.)
And Roche in December gained access to related Enhanze delivery technology designed to increase the absorption and dispersion of biologics, which Roche initially will apply to three biologic targets. It has a 10-year option to apply the technology to 10 additional targets in a deal worth up to $612 million. (See BioWorld Today, Dec. 7, 2006.)
Halozyme got about $60 million in up-front license fees and equity investments from the two deals.
With those programs partnered, Halozyme is focused on development of its additional products based on the rHuPH20 hyaluronidase enzyme, as well as products from other enzymes in its pipeline. It also has an approved product, Cumulase, used in the treatment of oocytes to facilitate certain in vitro fertilization procedures. That product, also based on PH20 hyaluronidase, generated 2006 sales of more than $300,000.
A lead unpartnered program at Halozyme entails the use of the rHuPH20 to enhance the delivery of chemotherapeutic agents. Its Chemophase product is in a Phase I/IIa trial in superficial bladder cancer.
Halozyme also can use the rHuPH20 Enhanze technology on large molecules not covered by the Roche alliance, and recently reported that the first trial in that setting showed improved bioavailability. The compound used in the trial was not disclosed or if that compound is one to which Roche has rights.
The goal now, Lim said, "is to invest some of the proceeds in non-ph20 products. We will accelerate development of our own products. These include new and improved versions of chemotherapeutic drugs; and we also are looking at developing innovative compounds within the extracellular matrix, that build upon our core expertise in matrix biology.
"We'll be unveiling more of our strategy later this year, Lim said.