West Coast Editor
Enjoying momentum from its early January deal with Bayer HealthCare AG to develop and commercialize the Phase III heart drug alfimeprase, Nuvelo Inc. priced a public offering of 6.5 million shares at $16 each to raise about $104 million.
Nuvelo's stock (NASDAQ:NUVO) closed Tuesday at $17.15, up $1.22.
Nicole Estrin, associate director of corporate communications and investor relations, said the company was in a quiet period and could not comment, but San Carlos, Calif.-based Nuvelo has a busy pipeline and said in SEC paperwork that the money would go "for general corporate purposes, including the advancement of our drug candidates in clinical trials, the development of a commercialization infrastructure, capital expenditures, and to meet working capital needs."
Along with alfimeprase, a direct-acting thrombolytic, the firm has rNAPc2, an anticoagulant that inhibits the factor VIIa and tissue factor protease complex in Phase II trials for acute coronary syndrome. It is moving ahead with a preclinical compound, NU206, for radiation- and chemotherapy-induced mucositis in the gastrointestinal tract.
A sliver of the money will be paid to The Irvine Company, which is Nuvelo's landlord of facilities in Sunnyvale, Calif. Under the terms of the lease, if Nuvelo raises more than $75 million in cash as a result of any single public offering, the firm must pay Irvine the lesser of 10 percent of that amount or any remaining deferred rent obligation.
Net proceeds from the recent financing will be about $97.3 million, which means a payment to Irvine of about $2.2 million, or about $3.7 million if underwriters exercise an overallotment option that would hike the net proceeds to about $111.9 million.
Several New York institutions are helping to make the financing happen. JP Morgan Securities Inc. and Deutsche Bank Securities Inc. are acting as joint book-running managers in the offering, and Lehman Brothers Inc. is acting as co-manager.
The alfimeprase agreement entered last month with Bayer, of Leverkusen, Germany, is worth up to $385 million, and the clot dissolver could reach the U.S. and European markets in 2008 to treat acute peripheral arterial occlusion and central venous catheter occlusion. (See BioWorld Today, Jan. 6, 2006.)
In December, Nuvelo got a special protocol assessment agreement from the FDA for its second pivotal Phase III trial to evaluate alfimeprase for acute peripheral arterial occlusion. Called NAPA-3 (Novel Arterial Perfusion with Alfimeprase-3), the multinational, double-blinded study will compare 0.3 mg/kg of alfimeprase to placebo in 300 patients, with the primary endpoint of avoidance of open vascular surgery within 30 days of randomization. Secondary and exploratory endpoints include safety measures such as incidence of bleeding, and pharmacoeconomic endpoints such as length of hospital stay and total time in the intensive care unit. An identically structured trial called NAPA-2 began earlier last year. (See BioWorld Today, April 19, 2005.)