West Coast Editor
Cadence Pharmaceuticals Inc. plans to use most of the $48.5 million from its initial public offering for continued work on two Phase III products - an intravenous form of acetaminophen for pain in adults and children, and Omigard (omiganan pentahydrochloride) gel to prevent and treat infections.
The San Diego-based firm, which priced 6 million shares at $9 each, filed for the IPO in July, shooting for as much as $86 million in gross proceeds. Underwriters have a 30-day option to buy up to 900,000 more shares to cover overallotments. The stock (NASDAQ:CADX) gained 40 cents Wednesday to close at $9.40.
Founded in May 2004 as Strata Pharmaceuticals Inc., Cadence buys rights to late-stage products for the hospital sector. In March, the firm raised $53.8 million though an equity financing to support its newly acquired rights to the acetaminophen product, called I.V. APAP, from New York-based Bristol-Myers Squibb Co.
BMS has completed Phase III trials for pain and pediatric fever in Europe and U.S., and Cadence plans to use that data in a new drug application filing, along with data from more trials that are expected to start in the fourth quarter. Results are due in the first half of 2008, and the NDA could be submitted in the second half.
Omigard came from Vancouver, British Columbia-based Migenix Inc., in exchange for a $2 million up-front fee and up to $27 million in milestones, as well as royalties. Cadence gained European and North American rights in a deal more than two years ago. (See BioWorld Today, Aug. 4, 2004.)
In August 2005, Cadence began a confirmatory Phase III trial, conducted under a special protocol assessment with the FDA, targeting a primary endpoint of prevention of local catheter site infection. The firm expects data in the second half of next year, and an NDA filing in the first half of 2008.
Net proceeds from the IPO, with existing cash, should be enough to finish clinical trials that will support new drug application filings for I.V. APAP and Omigard. About $43.1 million will be spent on those trials and other research and development activities. About $3 million will fund capital expenditures, mainly equipment for making I.V. APAP. The rest of the IPO money will be spent on general corporate purposes.
Based on the $9 IPO price, as of June 30 on a pro-forma as adjusted basis, Cadence's cash and cash equivalents would have been about $91.3 million, working capital would have been about $85.9 million and total stockholders' equity would have been about $83 million, according to SEC paperwork.
Merrill Lynch & Co., of New York, acted as sole book-running manager, and Deutsche Bank Securities Inc., also of New York, acted as co-lead manager for the offering. Pacific Growth Equities LLC, of San Francisco, and JMP Securities LLC, of New York, served as co-managers.