As its lead cardiovascular candidate works its way through Phase III trials, Acusphere Inc. privately placed $21.5 million in common stock and warrants.
The Watertown, Mass.-based company expects to complete the financing with two closings, the first of which will occur this week, bringing the company $17.9 million in gross proceeds. The remaining $3.6 million will be raised later this year following shareholder approval.
Acusphere plans to use proceeds to fund the development of its lead product, AI-700, an ultrasound contrast agent in Phase III trials for detecting myocardial perfusion. The condition is a sensitive marker of coronary heart disease, the leading cause of death in the U.S. Any remaining proceeds would be used for working capital and general corporate purposes.
The company is issuing a total of about 3.4 million shares at $6.25 each, along with warrants to purchase up to 688,000 additional shares of common stock at $8.50 per share to institutional and accredited investors. Broken down into the two closings, the company will issue about 2.9 million shares of common stock and warrants for about 573,000 shares this week. The second closing will involve 574,000 shares of common stock and warrants to purchase up to about 115,000 shares. SG Cowen & Co. LLC in New York is serving as exclusive placement agent.
Acusphere needs shareholder approval for the second closing because the number of shares exceeds a threshold determined by the Nasdaq Stock Market, which requires shareholder approval for the issuance of securities exceeding 20 percent of the company's outstanding common stock, if they are sold at a price less than market or book value.
The company's stock (NASDAQ:ACUS) fell $1.38 Monday, or 17.4 percent, to close at $6.56.
Acusphere had about 14.3 million shares of common stock outstanding prior to the financing, and will have 17.7 million shares outstanding following the second closing.
A spokeswoman for the company declined to comment due to the pending shareholder proxy vote, but Acusphere's president and CEO, Sherri Oberg, said in a prepared statement that the funding would cover the company's operations into 2006.
Oberg also said the company strengthened investor interest and confidence through the recent European licensing agreement with Nycomed Group and a lease agreement for commercial manufacturing space.
Acusphere signed the deal with Nycomed, of Roskilde, Denmark, in early July for the European marketing rights to AI-700. The deal potentially is worth $70 million for Acusphere through license fees, research and development funding and milestone payments. Acusphere plans to market AI-700 itself in U.S. Both parties intend to file regulatory applications in the first half of 2006. (See BioWorld Today, July 8, 2004.)
Just last week, Acusphere entered an agreement to lease commercial manufacturing space in Tewksbury, Mass., in order to meet initial commercial production needs for AI-700.
Acusphere develops its products with its porous microparticle technology. It has three products in clinical development. In addition to AI-700, the company is studying AI-850, a formulation of the cancer drug paclitaxel, and AI-128, an inhaled, sustained-release asthma formulation. The latter came out of a terminated joint venture with Dublin, Ireland-based Elan Corp. plc.