As it continues to launch its first cardiovascular product, NitroMed Inc. raised gross proceeds of $62.5 million in a private placement of common stock.

Institutional investors purchased 6.1 million shares at $10.25 apiece as part of the company's previously filed shelf registration statement with the SEC. Net proceeds, after offering expenses and placement agency fees, totaled about $58.6 million.

The Lexington, Mass.-based company intends to use the proceeds for general corporate purposes, including commercializing BiDil (isosorbide dinitrate/hydralazine hydrochloride), which was approved in June to treat heart failure in African-Americans. (See BioWorld Today, June 27, 2005.)

NitroMed now has enough money to take it through the next 21 months, said Sondra Newman, the company's director of investor relations. As of Sept. 30, NitroMed had $88 million in cash, suitable to support its activities for 10 months. The latest financing extends that time frame further into the fourth quarter of 2007. Expenses for 2006 are expected to reach between $95 million and $110 million.

NitroMed owns full rights to BiDil and has no plans for partnering. It currently has a contracted sales force through Publicis Selling Solutions, of Lawrenceville, N.J.

"Since launch, we have stated our intention to bring in-house a sales force, working through Publicis initially," Newman told BioWorld Today, "but then evaluating productivity, determining the best territories and best routes, and then taking those sales reps who are most productive in-house."

Last week, the company announced a modified agreement with Publicis to reduce the original 195 BiDil sales territories to 144 territories, which accounted for "90 percent of BiDil sales through year-end 2005," Newman said. The reduction is the company's first step in its plan to hire 140 to 155 of its own sales representatives by the third quarter.

Funds also will help NitroMed continue its work on a preclinical nitric-oxide enhanced cardiovascular agent, as well as a next-generation BiDil product. The company expects to file an investigational new drug application in the second quarter for the internally discovered cardiovascular drug NMI-3377, as it continues to work on an extended-release formulation of BiDil, called BiDil-XR.

"The benefit of that would be greater convenience," Newman said, adding that the dosing of BiDil-XR would be one or two times a day, compared with the current three-times-a-day dosing regimen. "This would expand our intellectual property around the BiDil franchise."

NitroMed currently has two method-of-use patents for BiDil that expire in 2020, as well as Hatch-Waxman market exclusivity through 2008.

From its launch last July through Sept. 30, BiDil sales were $1.1 million, representing most of the $1.5 million in revenues received by NitroMed in the third quarter. The product's wholesale acquisition cost is $1.80 a pill, and "the average number of pills per monthly prescription that we've seen," Newman said, "is approximately 90." The product is on the Medicaid formularies in all U.S. states, except Maine.

About 750,000 African-Americans have heart failure. BiDil's approval was based on data from the African-American Heart Failure Trial (A-HeFT), which showed that self-identified black patients taking BiDil plus current standard heart failure therapies experienced a 43 percent decrease in the risk of mortality compared to placebo (p=0.012), a 39 percent reduction in the risk of first hospitalization for heart failure (p<0.001), and a statistically significant improvement in most time points in response to a quality-of-life measure, the Minnesota Living with Heart Failure Questionnaire.

At the time of launch, some analysts said BiDil could earn sales upward of $70 million in 2005. The company will release last year's sales figures in early March, Newman said.

Founded in 1992, NitroMed completed its initial public offering in November 2003 and last raised $80 million December 2004. (See BioWorld Today, Dec. 9, 2004.)

New York-based JP Morgan Securities Inc. and San Francisco-based Thomas Weisel Partners LLC acted as placement agents in the offering announced this week.

NitroMed's stock (NASDAQ:NTMD) fell 2 cents Wednesday to close at $11.50.

In other financings news:

• Arrowhead Research Corp., of Pasadena, Calif., received $19.6 million following the closing of a previously announced private placement. Institutional investors received about 5.6 million shares of restricted common stock and 1.4 million warrants to purchase common stock. Arrowhead is a nanotechnology company that commercializes products for the materials, electronics, life sciences and energy industries.

• Ipsat Therapies, of Helsinki, Finland, closed a €3 million (US$3.7 million) private placement with InnovationsKapital, of Stockholm, Sweden. It will use the proceeds for research and development of its product portfolio, primarily P1A, a recombinant enzyme for the prevention of antibiotic-associated diarrhea, antibiotic resistance and gut disturbance. Ulf Tossman, of InnovationsKapital, will join Ipsat's board.

• MAP Pharmaceuticals Inc., of Mountain View, Calif., closed a $25.25 million Series C preferred stock financing that will be used to advance Phase II development of the company's two lead drug candidates to treat asthma and migraine. Brookside Capital led the financing, which included previous investors Perseus-Soros Biopharmaceutical Fund, Pequot Ventures, Bay City Capital, Skyline Ventures and Alexandria Real Estate Equities. Matt McPherron, of Brookside Capital, will join MAP's board.

• NexMed Inc., of Robbinsville, N.J., raised $8.3 million in gross proceeds from a private placement with institutional and accredited investors, including Southpoint Capital Advisors LP and Loeb Partners Corp. The company agreed to sell about 9.4 million shares at 89 cents each. Investors also will receive four-year warrants to buy 3.7 million shares of common stock at $1.11 per share. Proceeds will be used for general corporate purposes and for the company's product development programs based on its NexACT technology. Following the financing, NexMed has 65 million shares of common stock outstanding.

• Transgene SA, of Strasbourg, France, was awarded €1.3 million (US$1.6 million) in funding by the Lyon Biopole Competitiveness Cluster for the development of its therapeutic vaccine candidate against hepatitis C chronic infection. The money will be dispersed over the next three years and will cover 30 percent of the research and development costs for the program. The grant will go toward the development of TG4040, which is in preclinical studies and should enter a Phase I/II trial by mid-2006 to treat patients not responding to standard therapy.

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