A few weeks after reporting positive interim antibody results from an ongoing Phase III trial of lupus drug Riquent, La Jolla Pharmaceutical Co. priced a public offering to raise $34.8 million.
The San Diego-based firm agreed to offer 5.8 million shares at $6 each. Underwriters will be granted an option to purchase an additional 870,000 shares to cover any overallotments. Net proceeds are estimated at $33.1 million and will be used to support ongoing trials of Riquent (abetimus sodium), including production of the drug for the trials, as well as for general corporate purposes.
Due to SEC restrictions, the company was not able to comment, though the offering follows a run-up of La Jolla's stock on promising interim data from its Riquent trial. Data reported in early March, showed that systemic lupus erythematosus patients treated with 900 mg or 300 mg of Riquent per week had greater reductions in antibodies to double-stranded DNA than patients treated with 100 mg per week or placebo. That news pushed La Jolla's stock (NASDAQ:LJPC) up 30 percent to close at $4.13. Shares closed Friday at $6.16, down 55 cents.
Despite several setbacks in Riquent development - such as an approvable letter in October 2004 that required an additional study and failure to gain an accelerated approval plan for the drug - La Jolla has pushed forward with the candidate aimed at lupus renal disease. The company temporarily halted enrollment in the trial in 2005 to conserve cash, but started adding patients again last year, with hopes that the larger study would be better tailored to demonstrate statistical significance. (See BioWorld Today, Oct. 18, 2004.)
The Phase III study is designed to evaluate Riquent's efficacy in preventing or delaying renal flares associated with lupus renal disease. Aimed at lowering the levels of circulating antibodies to dsDNA, the drug is believed to work without the side effects typically seen with immune suppression products for lupus. Of the estimated 1 million lupus patients in the U.S., between 30 percent and 50 percent are believed to have renal disease.
In addition to Riquent, La Jolla has a preclinical pipeline of small-molecule SSAO inhibitors for treating autoimmune diseases and acute and chronic inflammatory disorders.
The company, which reported a net loss of $10.7 million, or 33 cents per share, for the fourth quarter, ended 2006 with a cash position of $42.9 million.
New York-based Needham & Co. LLC acted as the sole lead book-running manager and St. Louis-based A.G. Edwards & Sons Inc. served as co-manager.
In other financings news:
Diversa Corp., San Diego, said initial purchasers exercised in full their overallotment option to buy an additional $20 million aggregate principal amount of 5.5 percent convertible senior notes due 2027 in connection with the private placement that closed March 28, 2007. Including this overallotment, the offering totals $120 million aggregate principal amount of notes, resulting in net proceeds to the company of about $115.9 million. Diversa plans to use the funds for continued expansion of its biofuels business, continued investment on product development and commercialization efforts in its specialty enzyme business and for general corporate purposes. Shares of Diversa (NASDAQ:DVSA) gained 11 cents Friday to close at $7.95.
Xechem International Inc., of New Brunswick, N.J., said its subsidiary, Xechem Pharmaceuticals Nigeria Ltd., received final approval from the Nigerian Export-Import Bank for an additional loan of 350 million naira (US$2.6 million). Proceeds will support construction of a manufacturing facility. The company develops Nicosan, an anti-sickling drug originally developed by Nigerian scientists at the National Institute for Pharmaceutical Research and Development.