Santarus Inc. is raising $31.2 million to support sales and marketing costs of its proton pump inhibitor (PPI), Zegerid, and to fund other corporate activities.
The San Diego-based company is offering about 7.35 million shares of its common stock at $4.25 per share. New York-based SG Cowen & Co. LLC is acting as lead placement agent, while Toronto-based RBC Capital Markets Corp. is serving as co-placement agent for the offering, expected to close Aug. 22.
This marks Santarus' second follow-on offering since the company went public in April 2004 through a $54 million initial public offering, with shares priced at $9 each. It raised an additional $57 million four months later. (See BioWorld Today, July 26, 2004.)
Shares of Santarus (NASDAQ:SNTS) gained 34 cents Wednesday to close at $5.
Though unable to comment due to SEC-imposed quiet period rules, the specialty pharmaceutical company said during its second-quarter earnings call earlier this week that it planned to pursue fund raising before the end of the year. Santarus reported a net loss of $19.5 million, or 54 cents per share, for the three months ending June 30, and said its cash position of $73.9 million would sustain its operations for about nine months.
Net sales of its Zegerid powder (omeprazole) for oral suspension, an immediate-release PPI approved as a 20-mg dose in June 2004 and as a 40-mg dose in December, totaled about $3.1 million for the quarter. Zegerid powder is approved for the short-term treatment of active duodenal ulcer, heartburn and other symptoms associated with gastroesophageal reflux disease and erosive esophagitis diagnosed by endoscopy. The 40-mg product also marks the only FDA-approved PPI aimed at reducing the risk of gastrointestinal bleeding in critically ill patients.
Since its launch in February, Santarus said the 40-mg dose has comprised about two-thirds of Zegerid powder's revenue, and has helped increase the number of prescriptions by 89 percent, from 13,000 during the first quarter of 2005 to 25,000 in the second quarter.
The company has a co-promotion deal with Rockville, Md.-based Otsuka America Pharmaceuticals Inc. for marketing in the U.S., though Santarus said in its earnings call that it plans to seek additional opportunities, including potential overseas sales, to increase the distribution of Zegerid powder.
In the meantime, it is awaiting FDA approval on new drug applications submitted this year for two other formulations: Zegerid capsules and Zegerid chewable tablets, both offered in 20-mg and 40-mg doses. The company expects to hear from the agency regarding approval of the capsules around Feb. 26, 2006, and the PDUFA date for the chewable tablets is a month later.
Intellectual property relating to the immediate-release PPI was licensed in 2001 from the University of Missouri, in exchange for an up-front fee of $1 million along with regulatory and approval milestone payments and royalties on product sales.