In its fourth round of venture financing, Neuromed Pharmaceuticals brought in $25 million, a portion of which will support ongoing development of its lead drug, NMED-160, in Phase II studies to treat chronic pain.
The Series D round included new investor James Richardson & Sons Ltd. (JRSL), of Winnipeg, Manitoba, and existing investors such as Boston-based MPM Capital; Vancouver, British Columbia-based firms Neuro Discovery LP and GrowthWorks Capital; Ontario-based CMDF; Houston-based Cogene Biotech Ventures; the Royal Bank of Canada; and BDC Venture Capital, an investment arm of the Business Development Bank of Canada. Along with the financing, Hartley Richardson, of JRSL, will join the company’s board.
"We’re happy, not just with the money, but also bringing abroad JRSL - a group that has a history of really supporting and building quality enterprises," said Christopher Gallen, Neuromed’s president and CEO. "We already had a great group of venture capital investors, and this really capped it off nicely."
To date, the company has raised $74 million. Its last financing brought in $32 million in November 2003. (See BioWorld Today, Nov. 5, 2003.)
At the close of its Series D, the firm, previously known as Neuromed Technologies, changed its name to reflect its shift from research and discovery to a clinical development-stage company looking toward commercial opportunities.
Neuromed, which was founded as a spin-off from the University of British Columbia in 1998, is building a pipeline based on its two target-specific calcium channel platforms: N-type calcium channel blockers designed to treat chronic pain, and T-type calcium channel blockers aimed at treating anxiety, epilepsy and hypertension.
Funds from the recent financing are expected to sustain the company for about two years and will be used to push the lead N-type candidate, NMED-160, through Phase II studies "over the course of 2006 and 2007, with the goal of starting Phase III in 2008," Gallen told BioWorld Today.
At the same time, Neuromed will work to advance a second-generation N-type calcium channel blocker, while heading to the clinic with its T-type compounds, which could enter human trials in 2007.
"I believe we’re the only company in the world with a sole focus on developing calcium channel drugs," Gallen said, and successful approval could open the door to "a huge global market."
If approved, NMED-160 wouldn’t be the first N-type calcium channel blocker to hit the market. The target previously was validated by Dublin, Ireland-based Elan Corp. plc, which gained approval for its pain drug, Prialt (ziconotide) in December 2004. While Prialt "showed to be very powerful in blocking" the calcium channel, the drug is limited by its intrathecal administration, Gallen said.
U.S. sales of Prialt totaled $2 million for the fourth quarter of 2005, and $6.3 million for the full year. Shortly after gaining European approval for the drug last month, Elan sold Prialt’s European rights to Tokyo-based Eisai Co. Ltd., in a deal worth up to $100 million. (See BioWorld Today, Feb. 10, 2006.)
Neuromed’s NMED-160 and second generation N-type channel blockers are designed as oral and intravenously active drugs that "we believe will produce pain relief for chronic pain that’s as powerful as morphine, yet have very little or nothing of the major morphine side effects," he said.
And, with an estimated 50 million people in the U.S. suffering from chronic pain, "we think these are potential blockbuster compounds," he added.
Neuromed actively is seeking a global partner for NMED-160, and in that partner hope to find a co-developer for its second-generation N-type blockers.
"We’re looking for a transformative, Phase II-quality deal," Gallen said.
For now, the company plans to hold onto its T-type platform, hoping to ultimately build its own sales force to market the drug in smaller indications, while considering partnership opportunities for the larger markets, including hypertension.
Over the next couple of years, the company’s focus will be to work on its pipeline, preparing for the possibility of introducing Neuromed to the public markets.
"In the long run, it’s clearly a goal" to go public, Gallen said. "We have a great pipeline, and right now is a good time for us to really build value in the company."
Neuromed has offices in Vancouver and Conshohocken, Pa.
In other financing news:
• BioTrove Inc., of Woburn, Mass., closed an additional $7 million in an oversubscribed round of venture capital funding, bringing the total amount raised by the company since July 2005 to $15 million. Proceeds are expected to accelerate the commercialization of BioTrove’s OpenArray genomics and its RapidFire pharmaceutical screening product. Participating investors include Catalyst Health and Technology Partners, of Newton, Mass.; Echelon Ventures, of Burlington, Mass.; Fletcher Spaght, of Boston; and CB Health Ventures, of Boston.
• Cepheid, of Sunnyvale, Calif., priced a public offering of 10 million shares of common stock at $8.60 per share, which would pull in gross proceeds of $86 million. In addition, the company agreed to grant underwriters a 30-day option to purchase an additional 1.5 million shares to cover overallotments. Cepheid, a molecular diagnostics company, expects to use the proceeds to fund future acquisitions of molecular markers and complementary products, technologies or companies in fields such as oncology and infectious diseases. New York-based UBS Investment Bank is acting as sole book-running manager, with William Blair & Co. and Robert W. Baird & Co., both of Chicago, acting as co-managers. The offering is expected to close March 13. Shares of Cepheid (NASDQ:CPHD) closed at $8.56 Wednesday, down 59 cents.
• The Immune Response Corp., of Carlsbad, Calif., completed a private placement of $8 million of secured notes that are convertible into 400 million shares of stock at 2 cents per share. Investors also received warrants to purchase an aggregate of 1.2 billion shares of stock priced at 2 cents each, which could generate up to an additional $24 million in gross proceeds. Funds will be used to support the company’s ongoing and planned clinical activities and for general corporate purposes. Its lead products candidates are multiple sclerosis drug NeuroVax and HIV drug IR103, both of which are in Phase II. The company’s stock (OTC BB:IMNR) lost 10 cents Wednesday to close at 14 cents.
• Novelos Therapeutics Inc., of Newton, Mass., closed its previously announced private placement of 11.2 million shares priced at $1.35 each for gross proceeds of about $15.1 million. Investors also received warrants to purchase an aggregate of about 8.4 million shares of common stock at an exercise price of $2.50 per share. Novelos expects to use the funds to support Phase III development of NOV-002 in lung cancer. In separate news, the company said it filed a special protocol assessment for a single pivotal Phase III study of NOV-002 in advanced non-small-cell lung cancer, in combination with first-line chemotherapy, with a primary endpoint of overall survival. The company expects to finalize the SPA by the end of the second quarter and to initiate patient enrollment during the third quarter. Shares of Novelos (OTC BB:NVLT) gained 4 cents Wednesday to close at $1.91.
• Theratechnologies Inc., of Montreal, filed a preliminary prospectus in Canada in connection with an agreement to issue and sell 10.5 million shares at $1.95 each to a syndicate of underwriters led by BMO Nesbitt Burns, of Vancouver, British Columbia, and including Canaccord Capital, also of Vancouver, and Jennings Capital, of Calgary, Alberta. Gross proceeds are expected to total $20.5 million, plus overallotment funds if underwriters purchase an additional 1.6 million shares, and will be used to finance the company’s research and development work and working capital requirements.