Contributing Writer

Through a combination of private equity and venture debt financing, Elixir Pharmaceuticals Inc. pulled in $46 million, enough money to take the Cambridge, Mass.-based company "comfortably into 2008" said president and CEO William Heiden.

"This gives us time to think about our next financing and potentially entering the public markets, depending on milestones and market conditions," he told BioWorld Today.

The $31 million equity financing was led by MPM Capital with participation from current investors ARCH Venture Partners and Oxford BioScience Partners, as well as new investors CDIB BioScience Venture Management, JAFCO Co. Ltd. and YFY Bioscience. The $15 million venture debt was provided by Hercules Technology Growth Capital Inc.

Proceeds will support Elixir's pipeline of metabolic drug candidates, the most advanced of which is Glufast (mitiglinide calcium hydrate) for lowering post-meal glucose levels in Type II diabetes. Elixir licensed U.S., Canadian and Latin American rights to the drug earlier this year from Tokyo-based Kissei Pharmaceutical Co. Ltd. Glufast is marketed in Japan and has been tested in five overseas Phase III trials, all of which reached their primary endpoints, Heiden said.

In a recent pre-new drug application meeting with the FDA, however, the agency asked for data in U.S. patients, specifically minorities. Elixir is designing a trial to meet that request, and Heiden expects it to be "straightforward" with a primary endpoint of HbA1c reduction. He hopes to begin enrollment in the first quarter, positioning the company for an NDA filing in 2008 and potential launch in 2009.

"We'll probably do the Glufast trial in combination with metformin, which is representative of the current clinical practice," Heiden said. Metformin is the only diabetes drug recommended by the American Diabetes Association for use at diagnosis along with changes in diet and exercise, although patients often progress to other drugs, such as metiglinides and eventually insulin.

Combining Glufast and metformin in the trial may achieve another objective: providing the basis for a regulatory filing with Metfast, Elixir's combination of Glufast and metformin. While Glufast would be marketed to high-prescribing diabetes specialists and endocrinologists by a niche sales force, Metfast would appeal to primary care physicians and is "expected to be a much bigger market," said Ed Mascioli, executive partner with MPM Capital.

The diabetes market is crowded, and both Glufast and Metfast would face fierce competition, but that doesn't worry Heiden. "We have 25 employees, so our cash requirements are pretty small," he said. "Even with 50 sales reps, if we could bring in $50 million in revenue, we could be cash-flow positive."

Cash from eventual revenues and from the current financing also will be used to advance Elixir's preclinical ghrelin agonist and antagonist programs. Ghrelin, a peptide produced in the stomach, is a "very hot target for increasing and decreasing appetite," Mascioli said.

Elixir's ghrelin agonist program was licensed from Bristol-Myers Squibb Co. last year, and lead candidate EX-1314 is slated for investigational new drug application filing and clinical trial initiation next year with an initial focus on cancer cachexia (wasting). Other indications, such as other cachexias and gastroparesis, may follow.

Elixir's ghrelin agonist program is one of many in development: Sapphire Therapeutics Inc., Tranzyme Pharma, Dor BioPharma Inc., Theratechnologies Inc. and Ardana Bioscience Ltd. all have similar programs, some of which are in the clinic. But Heiden said there is room for "several players" in the field and Elixir is looking closely at the data others generate to evaluate differentiation opportunities and create the best possible profile for the drug.

Elixir's ghrelin antagonist program, on the other hand, is "the most advanced small molecule" in the field, Heiden said. The company is optimizing three series of chemicals to identify a lead compound and has seen encouraging animal data indicative of efficacy in the treatment of obesity and diabetes, including weight loss and reductions in cholesterol, triglycerides and HbA1c levels. Additionally, Elixir is conducting research around other targets associated with aging, and Heiden cited an "embarrassment of riches" including intellectual property, assays and early stage drug candidates.

In other financing news:

• AmpliMed Corp., of Tucson, Ariz., raised $8.5 million in the second close of its Series B financing, bringing the total to $14.6 million. The financing was led by Biotech Insight Ventures and included existing investors InvestBio Ventures, Valley Ventures and Solstice Capital. Proceeds will be used to support clinical trials with Amplimexon, a formulation of imexon for injection in oncology indications. A Phase II trial in metastatic melanoma and a Phase Ib trial in advanced pancreatic adenocarcinoma are scheduled to be completed early next year. An additional trial in patients with breast, lung and prostate cancer is ongoing.

• Cara Therapeutics Inc., of Tarrytown, N.Y., raised $19 million in a Series C financing to advance its preclinical programs in pain, including a CB2 receptor modulator and GPCR regulators, into the clinic. The financing, which is expected to carry the company through 2008, included participation by new investors MVM Life Science Partners and Alta Biopharma Partners, as well as existing investor Ascent Biomedical Ventures. Earlier this year, Cara licensed its lead program CR665, a Phase I selective peripheral kappa opioid receptor agonist, to ALZA Corp.

• MannKind Corp., of Valencia, Calif., plans to sell 17.5 million shares in a public offering, with an option for the underwriters to purchase an additional 2.6 million shares to cover overallotments. At Monday's closing price of $17.20, that would generate $346 million. The company is concurrently selling $100 million in senior convertible notes due 2013, with an option for the underwriters to purchase $15 million of additional notes to cover overallotments. An estimated 8.75 million shares from the public offering and $50 million worth of notes are reserved for sale to Chairman and CEO Alfred Mann. J.P. Morgan Securities Inc. and Merrill Lynch & Co. are acting as joint lead managers and joint bookrunners of each of the offerings. Wachovia Capital Markets LLC, CIBC World Markets Corp. and Leerink Swann & Co. Inc. are acting as co-managers of the common stock offering. Proceeds from the financings will be used to expand manufacturing capabilities and fund clinical trials, including ongoing Phase III trials with the Technosphere Insulin System.

• Pipex Pharmaceuticals Inc., of Ann Arbor, Mich., raised $13.7 million in a private equity financing. The company raised $9.2 million itself and $4.5 million through Pipex Therapeutics Inc., which merged with the shell company Sheffield Pharmaceuticals Inc. earlier this month to form Pipex. New investors included Ridgeback Capital, Perceptive Life Sciences Fund, Firebird Capital, William Harris Investors, Chestnut Ridge Partners, AFA Private Equity of Michigan, SDS Capital, Gemini Strategies and Whalehaven Capital, as well as senior management of Pipex. Proceeds will be used to file a new drug application for Coprexa in Wilson's disease and advance Phase II programs in multiple sclerosis, graft-vs.-host disease and other indications. (See BioWorld Today, Nov. 9, 2006).

• Tm Bioscience Corp., of Toronto, negotiated a $4 million (C$4.5 million) operating credit facility with Laurus Master Fund Ltd. Under certain conditions, Laurus can convert principal drawn under the facility into common shares of the company at an exercise price of C71 cents per share. Net funds to Tm are expected to be about $3.84 million and will be used for general operating purposes while the company's board completes the process of exploring strategic alternatives.

• TopoTarget A/S, of Copenhagen, Denmark, raised DKK126.7 million (US$22.4 million) through the sale of 4.2 million shares at DKK30.50 per share. Following the completion of the financing, the company has 45.7 million shares outstanding. TopoTarget markets Savene for the treatment of anthracycline extravasation, the leakage of chemotherapeutics into surrounding tissue, and has seven oncology drugs in clinical development.

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