West Coast Editor

With a protocol approved by the FDA and a trial under way with its lead product, delivery firm Penwest Pharmaceuticals Co. will net about $32.8 million through a private placement of about 3.1 million shares of common stock at $11.20 per share.

"It depends on how much we burn, but this basically gets us about two and half years of cash and bridges us to profitability, which was really the goal," said Jennifer Good, senior vice president and chief financial officer of Danbury, Conn.-based Penwest.

The company's stock (NASDAQ:PPCO) closed Friday at $11.98, down 49 cents.

In late November, the FDA gave its blessing under the special protocol assessment process to a 12-week Phase III trial of extended-release oxymorphone tablets (oxymorphone ER), partnered with Endo Pharmaceuticals Inc., of Chadds Ford, Pa. The drug will be tested in patients who have had no prior or recent treatment with opioid analgesics. Endo has exclusive sales and marketing rights in the U.S.

"Endo is running that trial," Good said. "This money really is going to be targeted at a whole bunch of compounds" for central nervous system disorders, the most advanced of which are two at the Phase III stage.

"We haven't said a lot about them," she told BioWorld Today, although the disclosed indications are depression and epilepsy. "They are new formulations of existing drugs. The one in epilepsy uses our newly developed gastro-retentive system, and they're all based on TimeRx."

Penwest's TimeRx is an oral, controlled-release platform that has yielded Geminex, a dual drug delivery system designed for independent release of differing active ingredients in a single drug, and SyncroDose, a chronotherapeutic drug delivery system that releases a drug at a specific site and time.

Earlier this month, Penwest said its pivotal trial with its other lead product, low-dose PW2101, a beta blocker for hypertension and angina, missed its primary endpoint (p=0.05) but hit some of the secondary endpoints. The primary endpoint was a change in the mean seated office cuff diastolic blood pressure from baseline to week six.

In the first pivotal trial conducted with the low strength of PW2101, the drug did demonstrate a statistically significant reduction in exercise-induced heart rate in volunteers, meeting the primary endpoint.

"We had already filed a three-higher strengths [new drug application] for that drug," Good said. "We actually think we have a chance of getting the low dose approved. We just have to submit the new data by February, but that won't be a problem."

The FDA accepted the NDA for review at the start of November.

Penwest last made major news in the summer of 2003 when the company raised net proceeds of $49.4 million in a pair of private placements over a two-day period, selling about 1.9 million shares at $21 apiece, followed by a sale of 603,000 shares at the same price. The sales grossed $40 million and $12.7 million, respectively. (See BioWorld Today, Aug. 6, 2003.)

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