Advancis Pharmaceutical Corp. is grossing $24 million through a stock-and-warrant sale to help keep its operations running for the next four quarters, during which time the company hopes to get its lead product across the regulatory finish line.
The anti-infective firm plans to use the new funds to support the approval process of Amoxicillin Pulsys, its product for strep throat, as well as for working capital and general corporate purposes. Germantown, Md.-based Advancis plans to spend between $25 million and $33 million this year. Coupled with previously announced cost-reduction initiatives - 33 employees were cut as part of streamlining efforts begun a year and a half ago, which have also included salary decreases and an R&D slowdown - the company expects its latest proceeds to provide sufficient capital to fund the business through next March.
By then, Advancis expects to have launched Amoxicillin Pulsys, a once-daily product designed to treat adolescents and adults with acute pharyngitis and/or tonsillitis. The Pulsys delivery technology is designed to exploit a biological finding that bacteria exposed to antibiotics in front-loaded pulses are killed more efficiently and effectively than those under standard treatment regimens.
But first the FDA review process remains. Advancis is awaiting word on whether its new drug application is sufficient for evaluation after resubmitting it two weeks ago. A decision should come late next month. The company was compelled to refile after the agency in February rejected the NDA because it did not include a proposed commercial batch record or a detailed commercial process description with process parameters and in-process controls.
The FDA is expected to review the NDA for filing acceptance within 60 days, and if accepted, Advancis expects action in January. If approved, Amoxicillin Pulsys could be launched a month later.
The submission is based on Phase III data showing that once-daily, 775-mg pulsatile-release formulation of amoxicillin dosed over 10 days was statistically non-inferior to 250 mg of penicillin VK dosed four times daily. In addition, Amoxicillin Pulsys produced an 85 percent bacterial eradication at patients' post-therapy test-of-cure visit compared to 83.4 percent for those on penicillin. (See BioWorld Today, Aug. 11, 2006.)
Those successful findings contrasted with less compelling data from two prior Phase III studies, one in adults and adolescents and another in children. In those trials, which tested a seven-day treatment regimen, Amoxicillin Pulsys' overall bacterial eradication fell well below the FDA's preferred 85 percent threshold: 77 percent in the adult and adolescent population and 68 percent for the pediatric patients. (See BioWorld Today, June 17, 2005, and July 25, 2005.)
Soon after came the job cuts and a lost partnership with Par Pharmaceutical Corp., of Spring Valley, N.Y. (See BioWorld Today, Aug. 1, 2005, and Aug. 6, 2005.)
The definitive purchase agreements call for the private placement of units comprised of nearly 10.2 million common shares and warrants for another 7.6 million, priced at $2.36375 apiece. The warrants are good for five years and exercisable at $2.27 each.
Prior to the offering, Advancis had $15.4 million in cash reserves as of Dec. 31, as well as 31.5 million shares outstanding. Buyers include existing shareholders and several new institutional investors. Pacific Growth Equities LLC, of San Francisco, acted as the placement agent for the transaction, which is expected to close later this month.
On Tuesday, Advancis' stock (NASDAQ:AVNC) fell 9 cents to $2.41.
In other financing news:
• Altus Pharmaceuticals Inc., of Cambridge, Mass., plans to publicly offer 6 million common shares pursuant to an effective registration statement, which would raise about $90 million. In addition, the biopharmaceutical company plans to grant a 30-day, 900,000-share overallotment option to the underwriters. All the shares are being offered by Altus, which is developing protein therapeutics for gastrointestinal and metabolic disorders. Merrill Lynch & Co. and Morgan Stanley and Co. are joint book-running managers, and Cowen & Co. and Leerink Swann & Co. are co-managers.
• BioMS Medical Corp., of Edmonton, Alberta, filed a preliminary short-form prospectus with Canadian securities authorities in connection with a public offering of common shares to raise about C$35 million (US$30.5 million). The company, which is developing products for multiple sclerosis, plans to use the net proceeds to expand its clinical trial programs, as well as for general and corporate purposes. BioMS also granted the underwriters a 30-day overallotment option to purchase an additional 15 percent of shares offered pursuant to the offering. Orion Securities Inc. and Desjardins Securities Inc. will act as co-lead underwriters on behalf of a syndicate of dealers, and Jefferies & Co. Inc. will act as a U.S. placement agent in the offering of shares on an exempt basis in the U.S.
• Orexigen Therapeutics Inc., of San Diego, said it plans to offer 6 million common shares in its proposed initial public offering within a range between $11 and $13. After pricing the offering, the central nervous system-focused company expects its stock to trade as "OREX" on the Nasdaq Global Market.