Contributing Writer
Vasogen Inc. raised $20.3 million through the sale of shares and warrants to fund its clinical programs.
The company's stock (NASDAQ: VSGN) took a hit on the news, falling 11 cents Thursday, or 20 percent, to close 43 cents.
Vasogen President and CEO David Elsley told BioWorld Today he tries not to place too much value on a one-day stock reaction and maintained that the financing is an "excellent deal for all shareholders" and puts the company in a strong financial position.
The Mississauga, Ontario-based company sold 43.2 million units at 47 cents per unit, netting approximately $18.8 million after fees and expenses. Each unit consists of one share and four-tenths of a five-year warrant to purchase a share at 63 cents, and one-tenth of a six-month warrant to purchase a share at 53 cents. Vasogen would get an additional $13.2 million if all of the 21.6 million warrants are exercised.
Rodman & Renshaw LLC served as the placement agent for the deal, which is expected to close on Nov. 10.
Vasogen plans to use the funding primarily to support development of Celacade for chronic heart failure and VP025 for various neuro-inflammatory conditions.
Celacade, a device designed to expose a patient's cells to oxidative stress and stimulate an anti-inflammatory response, has suffered several setbacks in recent years. In August 2005, Vasogen halted a Phase III trial in patients with symptomatic peripheral arterial disease after an external safety and efficacy monitoring committee reported a lack of efficacy. Final analysis of the data presented in March 2006 concluded that the trial had not met its primary endpoint, prompting the company to discontinue the program despite seeing encouraging anti-inflammatory responses. (See BioWorld Today, Aug. 31, 2005, and March 14, 2006.)
A second Celacade program in chronic heart failure also hit a snag a few months back when a Phase III trial failed to meet its primary endpoint of significantly reducing the risk of death and cardiovascular hospitalization in the total population. Yet positive results emerged in several subsets: Vasogen reported that Celacade treatment reduced the risk of death or first cardiovascular hospitalization by 26 percent in a subset of patients with no prior history of heart attack (p=0.02) and by 39 percent in the pre-specified subgroup of patients with NYHA Class II heart failure at baseline (p=0.0003). Patients in the overall intent-to-treat population also experienced a significant improvement in quality of life. (See BioWorld Today, Jun. 27, 2006.)
Elsley told investors at the Rodman & Renshaw Annual Healthcare Conference earlier this week in New York that he thinks those data are compelling enough to take to U.S. and Canadian regulatory authorities.
The company is planning discussions with the FDA in the first quarter of 2007 with the hope of filing a premarket approval application. FDA regulations provide 180 days to review and decide on a PMA, but the agency cautioned that the review time is "normally longer" and may involve an advisory committee meeting.
In the meantime, Vasogen is seeking partners for the future commercialization of Celacade both in the U.S. and in Europe, where it already has a CE Mark, the medical device marketing approval requirement. Elsley said partnering discussions are "ongoing" for both regions.
Vasogen is also gearing up to begin a Phase II trial in the first quarter of 2007 with VP025, a bilayered phospholipid microparticle that elicits an anti-inflammatory response by mimicking apoptosis. The drug was found to be safe and well tolerated in a Phase I study, and no drug-related serious adverse events were reported. Anti-inflammatory activity has been demonstrated in preclinical models of Parkinson's disease, Alzheimer's disease, amyotrophic lateral sclerosis and diabetic retinopathy.
