West Coast Editor
In a year that’s held mixed news for CombinatoRx Inc. - its Phase II psoriasis drug failed in February, but an osteoarthritis compound showed benefit the month before, also in Phase II - the firm entered definitive agreements for a private placement raising about $48 million.
Institutional and other investors will buy about 4.7 million shares of common stock at $10.25 per share, in a deal expected to close today.
Boston-based CombinatoRx’s stock (NASDAQ:CRXX) closed Thursday at $10.50, down 60 cents.
The company went public in November, selling 6 million shares at $7 each to raise $42 million. (See BioWorld Today, Nov. 10, 2005.)
Robert Forrester, chief financial officer, said seven products are in Phase II trials, and the cash raised will go toward those studies, as well as bringing more drugs into the clinic.
"We have 10 Phase II trials reporting [data] in the next eight to 12 months," he said, noting that "because we have this head start of taking combinations of approved drugs into the clinic, we can get there much more quickly and cheaply."
The oral psoriasis drug, CRx-104, was dropped after Phase II data failed to show statistical significance in a 103-patient, 12-week trial comparing the compound - a low dose of cyclosporine combined with loratadine - to a low-dose cyclosporine. (See BioWorld Today, Feb. 23, 2006.)
That setback didn’t sting as bad as it might have, though, thanks to better news in January, when CombinatoRx’s first-ever statistical significance with one of its combo drugs. Low-dose prednisolone and dipyridamole, in a drug known as CRx-102, proved positive in preliminary data from a Phase II trial that tested the compound in patients with osteoarthritis of the hand. (See BioWorld Today, Jan. 31, 2006.)
The company often is asked whether CRx-102 is the "favorite child," Forrester said.
"We love them all, when they do well in their exams, and [CRx-102] did extremely well," he said. Though he stopped short of calling it the lead compound, CRx-102 has been chosen to move into Phase III trials, and another will be chosen later this year to advance.
"That’s our goal," Forrester said. "We’d obviously love to have more than that. It becomes a question of how many we can afford."
Partnering those compounds will be considered later, he said. A big pharma collaborator might be sought for a drug marketed to primary-care physicians, while CombinatoRx could sell certain niche products on its own, Forrestor said.
"It’s probably too soon to say [which candidates would be eligible for partnering]," he added. In the case of CRx-102, for example, "we’ve seen activity in osteoarthritis, but it’s likely to have activity broadly in inflammatory diseases," Forrester said.
CombinatoRx ended 2005 with $102.4 million in cash and expects to net about $45 million from the latest financing, he said. The burn rate this year is estimated at $32 million to $37 million, "increasing a little bit next year, as we go into later-stage clinical studies," Forrester said.
The company has a potential $500 million deal with Vancouver, British Columbia-based Angiotech Pharmaceuticals Inc. for up to 10 CombinatoRx compounds, and this year signed a partnership with Paris-based Fovea Pharmaceuticals SA for the development and commercialization of combination drugs to treat ophthalmic diseases. (See BioWorld Today, Oct. 5, 2005.)
In other financing news:
Chemokine Therapeutics Corp., of Vancouver, British Columbia, placed 1 million shares with an institutional investor at a price of C$1.06 (US$0.91) each for gross proceeds of C$1.06 million. There were no agent fees, and the placement was in addition to about 5.4 million shares for C$5.8 million placed on March 22, increasing the gross proceeds of the private placements to about C$6.86 million.