Not even a year removed from its initial public offering, Myogen Inc. is bringing in $60 million through a stock-and-warrant sale.
The cardiovascular drug development company entered definitive purchase agreements for a private placement in which it will issue 9.2 million common shares at about $6.53 apiece, which equals the closing bid of the stock when the deal was consummated though is less than half the IPO per-share value, together with warrants to purchase up to 1.8 million additional shares at an exercise price of $7.80 each. Denver-based Myogen raised $70 million through the sale of 5 million shares at $14 apiece in its IPO. (See BioWorld Today, Oct. 31, 2003.)
"We've been in a dialogue with investors and investment banks for a long time," Joseph Turner, Myogen's chief financial officer, said. "After completing the IPO, and once we were out of the quiet period, we then began to talk with the markets to keep people updated. It became apparent to us that there was some receptivity out there, so we began to prepare for what turned out to be the private placement."
The funding will be added to its $85.8 million cash position as of June 30. It had about 26.5 million shares outstanding as of that date, and posted a $13.2 million net loss in the preceding three months.
Myogen plans to use its latest proceeds to continue the development of its three late-stage products - enoximone, ambrisentan and darusentan - as well as to further its other research programs, prepare for the potential launch of enoximone and ambrisentan, and for working capital and general corporate purposes.
"We will be committing funds, not only for the clinical development," Turner said, "but also for all of the ancillary work including the pre-commercialization programs."
Both enoximone and ambrisentan are in Phase III, with the former nearing the end of pivotal trials called ESSENTIAL I and II for chronic heart failure and the latter also well into pivotal studies, titled ARIES I and II, for pulmonary arterial hypertension. Earlier this year, Myogen hit a bump in the road in its enoximone program, as one of three Phase III studies, EMOTE, missed statistical significance in its primary endpoint. The news caused the company's stock to lose more than a third of its value on the day the news hit the market. Still, Myogen expects the entire program to better define the drug's efficacy. (See BioWorld Today, March 29, 2004.)
Darusentan remains in a Phase IIa dose-ranging trial in patients with resistant hypertension. The company markets a product in Europe, Perfan IV, an intravenous formulation of enoximone for acute decompensated heart failure.
All three compounds are in-licensed from pharmaceutical firms. Terms of the various agreements call for Myogen to pay royalties on eventual sales of enoximone, as well as milestone payments and royalties related to the development and eventual sales of ambrisentan and darusentan.
Relative to its latest offering, the shares have yet to be registered, though the company agreed to file a registration statement with the SEC covering their resale. The financing is expected to close Wednesday.
Investors included a group of previous stockholders: New Enterprise Associates, of Menlo Park, Calif.; InterWest Partners, also of Menlo Park; Perseus-Soros Biopharmaceutical Fund, of New York; and Sequel Venture Partners, of Boulder, Colo.; as well as several new investors.
CIBC World Markets and Lazard Freres & Co. LLC acted as joint placement agents in the transaction. Both are based in New York.
On Monday, Myogen's stock (NASDAQ:MYOG) gained 48 cents to close at $6.98.