Orexigen Therapeutics Inc. registered to go public, filing for an estimated $86.25 million initial public offering.
The obesity-focused biopharmaceutical company, which has yet to specify the number of shares it plans to sell or price, plans to use the bulk of proceeds to finance the late-stage development of its two lead product candidates, Contrave and Excalia. Additional proceeds would fund working capital and other general corporate needs.
San Diego-based Orexigen, which registered for listing on Nasdaq as "OREX," had about 37.7 million shares outstanding on Nov. 30. Just before then, the company raised $30 million in a Series C financing for its pair of obesity drugs. (See BioWorld Today, Nov. 27, 2006.)
Both Contrave and Excalia, combination products comprising sustained-release (SR) formulations of existing drugs, are poised to enter a large market: Government estimates say 30 percent of Americans are obese.
Contrave, a fixed-dose combination of naltrexone SR and bupropion SR, is designed to induce sustained weight loss and is expected to advance into a Phase III trial in the first half of next year. Naltrexone was chosen as a complement to bupropion in order to block compensating mechanisms that attempt to prevent long-term, sustained weight loss.
Phase IIb data have shown that three Contrave dosage groups demonstrated a mean weight loss of 4.3 percent to 5.4 percent of baseline body weight at 24 weeks, on an intent-to-treat basis, compared to mean weight loss of 0.8 percent among the placebo group. Early findings from an open-label portion of the same study have demonstrated even better results for the three Contrave dosage groups, with a mean weight loss of 4.6 percent to 6.1 percent of baseline body weight.
In Phase III, 1,500 patients will be enrolled in a double-blind, placebo-controlled study that should last a year. Assuming data are positive, Orexigen plans to file a new drug application in 2009.
Excalia, a fixed-dose combination of zonisamide SR and bupropion SR, is designed for more rapid weight loss. Initial Phase II data showed that it produced a mean weight loss of 5.2 percent of baseline body weight at 16 weeks and 5.8 percent at 24 weeks, on an intent-to-treat basis. An NDA for Excalia is expected in 2010.
The company has worldwide marketing rights to both Contrave and Excalia. In parallel with furthering its obesity products in the near term, Orexigen plans to move one or more of its preclinical neuropsychiatric programs into clinical trials next year. That portfolio is made of several combination chemical entities, as well.
The company has raised $76 million to date. Its top shareholders are Domain Associates LLC, of Princeton, N.J., with a 21.3 percent stake equal to about 8 million shares; KPCB Holdings Inc., of Menlo Park, Calif., which controls about 7.5 million shares or 20 percent; San Francisco-based Sofinnova Venture Partners VI LP, with a 15 percent stake of about 5.6 million shares; BAVP VII LP, of Foster City, Calif., which also controls about 5.6 million shares; Menlo Park-based Montreux Equity Partners, with 7.4 percent or 2.8 million shares; and Morgenthaler Partners VII LP, also of Menlo Park, with 5.9 percent or 2.2 million shares.
The IPO's underwriters include Merrill Lynch; Pierce, Fenner & Smith Inc.; J.P. Morgan Securities Inc.; JMP Securities LLC; and Leerink Swann & Co. Inc.
• Affymax Inc., of Palo Alto, Calif., completed its initial public offering of 3.7 million shares and the exercise by underwriters of their option to purchase 555,000 shares to cover overallotments. Net proceeds total about $96 million, with the bulk of funds going to support further development of Hematide, a synthetic peptide-based erythropoiesis-stimulating agent for anemia associated with chronic kidney disease and cancer. Morgan Stanley & Co. Inc. acted as the sole bookrunner and co-lead manager, while Cowen and Co. LLC, Thomas Weisel Partners LLC and RBC Capital Markets acted as co-managers. (See BioWorld Today, Dec. 18, 2006.)
• EntreMed Inc., of Rockville, Md., completed its registered offering of 10.7 million shares of common stock at $1.60 per share to select institutional investors to raise $17.1 million. ThinkEquity Partners LLC acted as lead placement agent and Rodman & Renshaw LLC acted as co-placement agent. Existing and new institutional investors participated, including Celgene Corp., of Summit, N.J., EntreMed's principal shareholder. Proceeds will provide the financial resources for the company's development programs into 2008.
• Favrille Inc., of San Diego, entered a committed equity financing facility with Kingsbridge Capital Ltd. in which Kingsbridge will provide up to $40 million of capital during the next three years through the purchase of newly issued shares of Favrille's common stock. Favrille will determine the exact timing and amount of the financings. The company also has issued to Kingsbridge a warrant to purchase 250,000 shares at $3.98 per share. Favrille is developing FavId, which is based on genetic information extracted from a patient's tumor. It is in Phase III development for follicular B-cell non-Hodgkin's lymphoma and Phase II trials in other B-cell NHL indications.
• GenVec Inc., of Gaithersburg, Md., obtained commitments from selected institutional investors to buy about $19.7 million in shares of its common stock in a registered direct offering. The company will sell up to 9.6 million shares at $2.05 apiece. Net proceeds are expected to be about $18.3 million. Rodman & Renshaw LLC acted as the exclusive placement agent, and Ferris Baker Watts acted as a financial adviser. GenVec intends to use proceeds to fund its research and development programs, including conducting clinical trials and discovering additional product candidates, and to fund capital expenditures and other general corporate purposes. The company reported positive interim survival data earlier this week from its Phase II/III trial of TNFerade in pancreatic cancer. (See BioWorld Today, Dec. 20, 2006.)
• Lipid Sciences Inc., of Pleasanton, Calif., closed a private placement of common stock with fundamental institutional investors led by RA Capital Management. The 4.6 million shares were priced at $1.35 each resulting in $6.2 million in gross proceeds. The company expects to use the net proceeds to fund all aspects of its HDL therapy development efforts, including the completion of its clinical trial for HDL Selective Delipidation and additional investment in its HDL mimetic peptide development program. Oppenheimer & Co. acted as the placement agent for the company.
• Medicure Inc., of Winnipeg, Manitoba, entered agreements with U.S. institutional investors raising gross proceeds of about $20.3 million. Medicure intends to issue about 15.6 million shares at $1.30 each, together with warrants for the purchase of about 3.1 million additional common shares. The warrants have a five-year term and an exercise price of $1.70. Proceeds will be used to help fund the ongoing development of Medicure's lead product, MC-1, as well as for general corporate purposes. Deutsche Bank Securities Inc. acted as the lead placement agent and A.G. Edwards & Sons Inc. and Montgomery & Co. LLC served as co-placement agents for the transaction.
• PSivida Ltd., of Perth, Australia, is raising $2.9 million through the placement of 14.2 million shares to Australian and European investors priced at A26 cents per share (US$2 ADR equivalent). The raising is an interim financing measure prior to the expected closing of the definitive documents with Nordic Biotech Advisors for a $4 million corporate investment in pSivida and a $22 million investment over time in a special-purpose vehicle. The SPV is expected to fully fund pSivida's portion of costs related to its lead ophthalmic product, Medidur, for diabetic macular edema. The company said it is committed to reducing its cash burn with cost-cutting measures to begin at the end of this month.