Privately held Solstice Neurosciences Inc. brought in $85 million through a combination of Series B funding and debt financing to support its ongoing activities involving its marketed botulinum toxin Type B product, Myobloc, in cervical dystonia.

The Malvern, Pa.-based firm has spent its time building the Myobloc franchise since it was formed in 2004 to in-license worldwide rights to the product from Dublin, Ireland-based Elan Corp. plc. Since then, Solstice has opened manufacturing and customer operations in South San Francisco and has built a nationwide sales force to promote Myobloc, an injectable solution approved in the U.S. in 2000 to reduce the severity of abnormal head position and pain in patients with cervical dystonia, a movement condition that primarily affects the muscles of the head and neck.

Solstice executives could not be reached for comment, but the company said in its press release that money from the latest financing also would be used to fund growth initiatives and advance product development.

Myobloc also is approved in Canada, and is sold as Neurobloc in eight European markets. In Japan, Solstice is aligned with Tokyo-based Eisai Co. Ltd. to develop and market the product as Nerbloc.

Most recently, the company expanded into the South Korean market. Solstice signed a deal in July with DreamPharma Corp., of Seoul, to develop and commercialize Myobloc for cervical dystonia, as well as for other therapeutic and cosmetic indications. Financial terms of that deal were not disclosed.

The Series B round was led by Highland Capital Management LP, of Dallas, and included Solstice's Series A investors - Stamford, Conn.-based Thomas, McNerney & Partners; Stockholm, Sweden-based Investor Growth Capital Inc.; New York-based Morgan Stanley Venture Partners; and Boston-based Oxford Bioscience Partners.

Aquilo Partners Inc., of San Francisco, served as exclusive placement agent for the equity funding.

Brett Pope and Nathan Hukill, both of Highland Capital, will join Solstice's board.

In other financings news:

• Avanir Pharmaceuticals Inc., of San Diego, completed its previously announced financing to raise $15 million. The company sold about 5.3 million shares of Class A common stock at $2.85 each, and purchasers also received warrants to buy 1.1 million shares at an exercise price of $3.30 per share. The net proceeds to Avanir are expected to total $14.4 million. Rodman & Renshaw LLC acted as the sole placement agent. Shares of Avanir (NASDAQ:AVNR) closed at $2.93 Wednesday, down 8 cents.

• Hollis-Eden Pharmaceuticals Inc., of San Diego, is raising $26 million through the sale of common stock and warrants to new and existing institutional investors. The company will sell 4 million shares at $6.50 each and will issue to investors four-year warrants to purchase up to an additional 800,000 shares at an exercise price of $8.75 each. Rodman & Renshaw LLC acted as exclusive lead placement agent and Canaccord Adams Inc. served as co-placement agent. The transaction is expected to close Monday. Hollis-Eden focuses on developing small-molecule compounds designed as metabolites or synthetic analogues of adrenal steroid hormones. The company's shares (NASDAQ:HEPH) fell $1.37, 18.7 percent, Wednesday to close at $5.97.

• MedGenesis Therapeutix Inc., of Victoria, British Columbia, raised $3.2 million in private equity financing, the proceeds of which will be used to advance the clinical development of its lead therapeutic program and the filing of an investigational new drug application. MedGenesis is working on developing therapeutics for central nervous system diseases, using its Convection Enhanced Delivery as a method of direct and targeted delivery of molecules to relevant areas in CNS. The company's therapeutic focus includes areas such as neuro-oncology, Parkinson's disease and Alzheimer's disease.

• Pharmacyclics Inc., of Sunnyvale, Calif., priced its public offering of 4.2 million shares of common stock at $4.75 per share, for gross proceeds of about $20 million. Net proceeds are expected to total $18.5 million. The company also granted underwriters a 30-day option to purchase up to an additional 630,000 shares to cover overallotments. Pharmacyclics said funds will be used for general corporate purposes, including clinical trials, preclinical research expenses, general and administrative expenses and for working capital. RBC Capital Markets Corp. and Thomas Weisel Partners LLC are acting as joint lead managers and joint bookrunners for the offering, which is expected to close Monday. Shares of Pharmacyclics (NASDAQ:PCYC) was unchanged Wednesday at $4.94.

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