Corautus Genetics Inc. is raising about $26.5 million in net proceeds through a public offering.
The Atlanta biopharmaceutical firm priced 7.5 million common shares at $3.85 apiece, and the stock is expected to be issued March 15, subject to customary conditions. The per-share price represents a slight discount off Thursday’s closing bid of $4.20, and on Friday the stock (NASDAQ:VEGF) lost 34 cents to close at $3.86. There will be 27.1 million shares outstanding after the offering.
Corautus expects to use its proceeds for working capital and other general corporate purposes, including clinical trials and manufacturing costs. Those latter two areas are expected to receive more than two-thirds of the new funds, according to a prospectus filed with the SEC. Officials, as the company could not comment due to SEC rules.
Much of its focus these days is on its lead VEGF-2 product candidate for severe angina resulting from coronary artery disease in patients with no other treatment options. Enrollment is moving forward in a Phase IIb trial called GENASIS (the Genetic Angiogenic Stimulation Investigational Study), and is expected to be completed by the end of June. To date, 295 of a planned 404 patients have been recruited.
The multicenter, randomized, double-blinded, dose-ranging and placebo-controlled study is designed to evaluate the safety and efficacy of VEGF-2 delivered by catheter directly into the ischemic tissue of the heart. As part of a collaboration with Boston Scientific Corp., of Natick, Mass., the product is delivered via the device firm’s Stiletto endocardial direct injection catheter system.
The FDA has granted the product fast-track designation for severe angina and, subject to obtaining positive results from the GENASIS trial - data could be out by the end of this year or into next year - the company expects to move into Phase III in the first half of next year.
Corautus also is pursuing other uses of VEGF-2 for diabetic neuropathy and peripheral artery disease, including critical limb ischemia and Buerger’s disease. The company expects to treat those indications by directly injecting VEGF-2 plasmid with a hypodermic needle into the skeletal muscle of the affected limb.
The gene therapy treatment approach is based upon angiogenesis research conducted at Boston’s Caritas St. Elizabeth’s Medical Center, with which the company has partnered to study some of the additional indications.
In its prospectus, Corautus estimated that it could support current and planned operations into the second quarter of 2008, given its new proceeds and existing cash and short-term investments - which totaled about $35.9 million as of Sept. 30, the last date for which its fiscal status had been reported.
Corautus filed a shelf registration statement for the offering in January. In addition, the company granted the underwriters a 1.1 million share overallotment option. Lazard Capital Markets LLC, of New York, is the offering’s lead manager and sole bookrunner, with Jefferies & Co. Inc., also of New York, acting as co-lead manager.