In its largest financing to date, privately held Merrimack Pharmaceuticals Inc. brought in $65 million in its Series E round to advance its Phase II-stage candidate, MM-093, against autoimmune diseases, and move forward with its early stage oncology pipeline.
Since its inception, the company has raised a total of $143 million in equity financing, plus an additional $9 million through a venture loan.
Driving the financing were new investors Jennison Associates, of Waltham, Mass.; Modal Capital, an affiliate of Boston-based Credit Suisse; funds advised by Noonday Asset Management LP, of Charlotte, N.C.; and TPG-Axon Capital, of New York. Existing investors Salt Lake City-based Sorenson Development and London-based WT Investment Advisors Fund LLP also participated.
"We believe those are some of the thought-leaders in the industry, who, fortunately, share our vision in developing high-value products," said James Scibetta, executive vice president and chief financial officer for Cambridge, Mass.-based Merrimack.
He added that the new investors also were known for investing in public companies "giving us the opportunity to interact with some people who may be important to the company in the future."
Merrimack's lead product, immunomodulator MM-093, is wrapping up a Phase IIb study in 258 patients suffering from rheumatoid arthritis. The company completed enrollment in the randomized, double-blind, dose-ranging trial in October, and it anticipates data being available this summer, Scibetta told BioWorld Today.
MM-093 is a recombinant version of human alpha-fetoprotein, believed to assist in modulating the immune system, though it's produced in very small amounts in an average adult's bloodstream. Merrimack created a genetically engineered version of the AFP protein, which is produced in transgenic goats through a collaboration with Framingham, Mass.-based GTC Biotherapeutics Inc.
Pending positive results from the Phase IIb trial, the company will "look at the data and determine where we go from there," Scibetta said.
Merrimack also is studying MM-093 in a Phase IIa pilot study in psoriasis patients. Those results are expected later this year. Beyond that, the company believes the product ultimately could be designed to treat "a multitude of autoimmune diseases," in other large market opportunities, such as multiple sclerosis.
Rheumatoid arthritis is estimated to affect about 1 percent of the population - about 5 million people worldwide, while psoriasis affects about 3 percent of the population. In the U.S. alone, about 7 million people develop psoriasis.
Behind its autoimmune program, Merrimack has an "emerging oncology pipeline," comprising antibody therapies targeting solid tumors. Those are in preclinical development, and the company hopes to begin submitting investigational new drug applications in 2007, Scibetta said.
All of Merrimack's candidates are derived from its Network Biology discovery platform, designed to provide quick drug discovery and development by combining biology, engineering and computational modeling.
In other financing news:
• Achillion Pharmaceuticals Inc., of New Haven, Conn., filed for its initial public offering, hoping to raise $75 million to support clinical development of its infectious disease drugs. Elvucitabine is in Phase II trials in HIV patients, and ACH-806 is being evaluated in a Phase I trial in chronic hepatitis C with partner Gilead Sciences Inc., of Foster City, Calif. A third drug candidate, ACH-702, is in late-stage preclinical studies for serious hospital-based bacterial infections. The company has not determined the number of shares or share price for the IPO. Upon its completion, Achillion's shares would be listed on Nasdaq under the symbol "ACHN." New York-based firms Cowen & Co. LLC, CIBC World Markets Corp., and JMP Securities LLC will be acting as the sole book-running manager, co-lead manager and co-manager, respectively.
• Arrowhead Research Corp., of Pasadena, Calif., agreed to contribute up to $10 million in additional capital to its majority-owned subsidiary, Calando Pharmaceuticals Inc., of Duarte, Calif., to accelerate preclinical testing of its RNAi therapeutics and to facilitate additional collaborations with large biotech and pharma companies. Calando's platform focuses on the delivery of siRNA therapeutics based on linear cyclodextrin polymers.
• BioSyntech Inc., of Laval, Quebec, completed the first closing of its previously announced private placement involving issuing 23.8 million units priced at C42 cents per unit for gross proceeds of C$10 million (US$8.5 million). Each unit consists of one common share and one-half of one warrant entitling the holder to purchase one common share priced at 65 cents. A second closing is expected to take place on or before April 28, for an additional amount of $5 million. Proceeds will be used to fund the clinical trials for BioSyntech's three leading products and for general working capital purposes. (See BioWorld Today, March 2, 2006.)
• Innodia Inc., of Montreal, completed a C$10 million round (US$8.5 million) of financing in convertible debentures, which will be converted into preferred shares at the next financing round. All the proceeds will be used to execute the company's business plans, which include supporting a Phase IIa trial in obesity with its lead compound, ID 1101, and moving into clinical development with ID 1135, an antidiabetic drug candidate. Purchasers included existing investors Montreal-based firms Picchio Pharma, CDP Capital and the Business Development Bank of Canada, along with new investors the Solidarity Fund QFL, and Fondaction CSN, both of Montreal.
• Medarex Inc., of Princeton, N.J., said it is offering to sell 10 million shares of common stock pursuant to an effective shelf registration statement in an underwritten public offering. It also granted the underwriters a 30-day option to buy up to 1.5 million shares to cover overallotments. The company will use net proceeds to develop its product candidates and for other general corporate purposes. Goldman, Sachs & Co. is acting as the sole book-running manager, while JP Morgan Securities Inc. is the joint lead manager of the offering. Medarex's stock (NASDAQ:MEDX) closed at $12.80 Monday, down 42 cents.
• PTC Therapeutics Inc., of South Plainfield, N.J., filed for an initial public offering, hoping to raise about $86.3 million and gain a listing on Nasdaq under the symbol "PTCT." The company has not yet determined the number of shares or share price for the offering. Proceeds from the offering would support clinical development of PTC124, which is in Phase II trials for treating cystic fibrosis and Duchenne's muscular dystrophy, and ongoing development activities for PTC299, which is set to begin testing in a Phase Ia trial in healthy volunteers and a Phase Ib trial in cancer patients. Money also would go toward research and development, working capital and general corporate purposes. New York-based Morgan Stanley & Co. Inc. will act as sole bookrunner and lead manager, while JP Morgan Securities Inc., also of New York, will act as co-lead manager and Pacific Growth Equities LLC, of San Francisco, will serve as co-manager.
• Seattle Genetics Inc., of Bothell, Wash., closed its public offering of 7.3 million shares of common stock to bring in net proceeds of $37.2 million for clinical and preclinical development of its existing product candidates, as well as manufacturing of clinical-grade materials and for other research and development activities. In addition, as previously announced, the company agreed to sell about 1.1 million shares of common stock to investment funds affiliated with New York-based Baker Brothers Investments at a price of $5.25 per share, subject to stockholder approval. The company's shares (NASDAQ:SGEN) closed at $4.97 Monday, down 19 cents. (See BioWorld Today, March 31, 2006.)
• Sequenom Inc., of San Diego, increased the amount of its private placement of common stock by $3 million to a total of $33 million. Siemens Venture Capital GmbH has agreed to join previously announced investors ComVest Investment Partners II LLC, Pequot Private Equity Fund IV LP and LB I Group Inc. The company will issue 60 million shares and 36 million purchase warrants exercisable at 70 cents per share. Net proceeds will be used for general working capital. (See BioWorld Today, March 29, 2006.)
• StemCells Inc., of Palo Alto, Calif., agreed to sell about 11.75 million shares in a registered direct offering to selected institutional investors at $3.05 each for total proceeds of about $33 million. Funds are expected to be used for working capital, product development and capital expenditures, as well as for other strategic purposes. UBS Investment Bank in New York acted as placement agent. Shares of StemCells (NASDAQ:STEM) fell 46 cents Monday, or 12.8 percent, to close at $3.12.