Neurochem Inc. is raising $61.2 million in a public offering to fund Phase III trials of Alzhemed, its first-generation product for Alzheimer's disease.
The Montreal-based company filed a registration statement in the U.S. and a prospectus in Canada to sell 4 million shares of its common stock, at a price of $15.30 per share. If underwriters purchase an additional 600,000 shares to cover overallotments, Neurochem anticipates total net proceeds of $58.5 million.
New York-based UBS Investment Bank is acting as the sole book-running manager, with co-managers CIBC World Markets Corp., of New York; Piper Jaffray & Co., of Minneapolis; Desjardins Securities Inc., of Montreal; Wells Fargo Securities LLC, of San Francisco; BMO Nesbitt Burns Inc., of Vancouver, British Columbia; and Fortis Securities LLC, of New York. The offering is expected to close on or about March 9.
Funds from the offering would be added to the $24.2 million in cash, cash equivalents and marketable securities the company reported as of Dec. 31. After the offering, the company will have about 34.4 million shares outstanding.
The company declined comment due to quiet period rules.
Neurochem's stock (NASDAQ:NRMX) lost 29 cents Friday to close at $15.05.
In its prospectus, the company estimated that $43 million of the proceeds would be used to fund trials of its investigational products, primarily Alzhemed. About $6 million would go toward other research and development programs, and the remainder would cover Neurochem's share of marketing costs for its lead product, Fibrillex, as well as add to the company's working capital and general corporate purposes.
Alzhemed entered an 18-month, 950-patient North American Phase III trial in June, and the company expects to complete randomization around the end of the second quarter. As of Feb. 21, Neurochem reported that 803 patients had been screened, and 519 of those had started receiving either a placebo or one of two doses of Alzhemed. The trial's primary efficacy endpoints are the evaluation of patients' cognitive abilities, and a global measure of performance using the Alzheimer's Disease Assessment Scale and the Clinical Dementia Rating Scale-Sum of Boxes.
A second Phase III trial is expected to begin in Europe during the second half of the year.
Alzhemed is a small-molecule amyloid-based approach designed to work by binding to soluble non-fibrillar amyloid protein (A[beta]), and inhibiting its interaction with naturally occurring glycosaminoglycans. The idea is to attack the deposition of amyloid fibrils in the brain, which appears to be a condition common to Alzheimer's patients.
The company said results released last month from a Phase II study extension of Alzhemed indicated that the majority of the patients suffering mild Alzheimer's showed an improved, or at least stabilized, cognitive function, while patients with a moderate form of the disease displayed cognitive scores similar to comparable historical controls.
While Neurochem has not secured a collaboration agreement to commercialize Alzhemed, the company said it was discussing several partnership proposals.
The company's most advanced product, Fibrillex, has completed a Phase II/III trial in amyloid A amyloidosis, with results expected next quarter, to be followed by the filing of a new drug application. The company expects to seek European approval early next year.
Neurochem agreed late last year to partner with Centocor Inc., of Malvern, Pa., a unit of Johnson & Johnson, in a deal that could be worth up to $54 million to Neurochem. Centocor would be allowed exclusive worldwide distribution rights for Fibrillex, except for Canada, Switzerland, China, Japan, Taiwan and South Korea. (See BioWorld Today, Dec. 23, 2004.)
A third product, Cerebril, has just completed a Phase IIa trial in hemorrhagic stroke due to cerebral amyloid angiopathy, a syndrome of recurrent strokes caused by amyloid deposits in the brain. The company said it anticipates initiating a Phase IIb trial near the end of the year.
Neurochem also is conducting preclinical testing on NC-1461 in preventing epileptic seizures caused by traumatic brain injury, and continues with ongoing discovery programs for next-generation compounds and vaccines for Alzheimer's disease.
OxiGene Raising $15M In Stock Sale
Waltham, Mass.-based OxiGene Inc. said it will receive gross proceeds of $15 million from the sale of 3.3 million shares of its common stock to accelerate product development.
The shares are being sold to institutional investors at $4.50 per share. Baltimore-based Legg Mason Wood Walker Inc. served as the lead placement agent for the offering, with Lazard Freres & Co. LLC, of New York, serving as co-placement agent.
OxiGene, which focuses on small-molecule therapeutics for oncology and ophthalmology indications, said it is working on receiving regulatory clearance this year for two late-stage trials of CA4P (Combretastatin A4P) in combination with other therapies. CA4P belongs to OxiGene's class of drug candidates called vascular targeting agents, and is designed to attack the vascular structure of solid tumors and other diseases that involve the formation of aberrant blood vessels.
The product also is being tested in eye diseases characterized by abnormal blood vessel growth. OxiGene said it hopes to begin enrolling patients this year in a Phase II study in myopic macular degeneration.
The company reported a cash position of $30.5 million as of Dec. 31. Shares of OxiGene (NASDAQ:OXGN) dropped 88 cents Friday to close at $4.45.
In other financing news:
• GlycoGenesys Inc., of Boston, agreed to close on gross proceeds of $6.5 million from institutions in exchange for issuing 6,500 shares of preferred stock, currently convertible into 6.5 million shares of common stock, and warrants to purchase 6.5 million shares currently priced at $1.23. The financing will take place in two closings, with investors purchasing 2 million shares of Series D preferred stock and warrants in the first closing, and the remaining 4.5 million shares in the second closing. GlycoGenesys intends to use proceeds to fund its trials of GCS-100LE, including a Phase I/II dose-ranging trial in multiple myeloma and a Phase I/II trial in chronic lymphocytic leukemia. Funds also will be used for manufacturing drug supplies for GCS-100LE, conducting additional preclinical studies, and for paying licensing fees, working capital and general corporate purposes.
• NeoRx Corp., of Seattle, is raising $4.1 million in private financing through the sale of 3.3 million shares of common stock and warrants to institutional investors to purchase an additional 1.4 shares of common stock. The purchase price of common stock is $1.25 per share, and the warrants are exercisable for a period of five years at an exercise price of $2 per share. NeoRx said it plans to use the proceeds to initiate trials for its cancer product, NX 473, and hopes to move the product into a Phase II trial in small-cell lung cancer during the first half of the year. A proposed Phase I/II trial in colorectal cancer is expected to follow. New York-based Rodman & Renshaw LLC acted as the placement agent for the transaction.
• Neurologix Inc., of Fort Lee, N.J., completed a recent financing round, through its subsidiary, Neurologix Research Inc., with an additional private placement of 539,000 shares of common stock at $1.30 per share, for proceeds of $700,000. With the funding, Neurologix raised a total of $3.2 million. Purchasers also received five-year warrants to purchase 135,000 shares of common stock, with an exercise price of $1.63 per share. The warrants are callable beginning in August 2007, if the share price exceeds $3.25 for a 10-day trading period. The company said proceeds are expected to be used for general corporate purposes, including working capital, capital expenditures and research and development activities. Neurologix Research develops treatments for disorders of the brain and central nervous system using gene therapies.