Less than four months after conducting its initial public offering, Santarus Inc. returned to the public markets, raising another $57 million in a follow-on offering.
The San Diego-based company priced 6 million shares of common stock at $9.50 per share, a discount to what the stock has traded at in recent months.
The IPO raised $54 million in April for the same number of shares, but at $9 apiece. (See BioWorld Today, April 2, 2004.)
Santarus' stock (NASDAQ:SNTS) closed at $10.20 on Thursday, just before the follow-on was announced. It rose 11 cents on Friday to close at $10.31.
Company officials could not comment due to an SEC-imposed quiet period. The prospectus, however, said Santarus will receive about $53 million in net proceeds, not including the overallotment option. It will use $42 million of the funds to build its sales and marketing capabilities, and $7 million for its research and development activities. The remaining $4 million would be spent on general corporate purposes.
Santarus believes the net proceeds and its existing cash will carry the company through at least the next 12 months. During that time, it plans to launch Rapinex powder for oral suspension 20 mg, complete pivotal trials for its capsule and chewable tablet products, and gain approval and launch a 40-mg formulation of Rapinex powder for oral suspension.
New York-based firms SG Cowen & Co. LLC and UBS Investment Bank are acting as joint book-running managers, while Thomas Weisel Partners LLC, of San Francisco, and RBC Capital Markets, of Toronto, are co-managers. The underwriters have an overallotment option on 900,000 shares that would bring the company another $8.55 million if exercised in full.
Following the offering, Santarus has 35.3 million shares outstanding.
The company gained FDA approval for its first product, Rapinex, in June. The approval was for the 20-mg powder formulation to treat heartburn and other symptoms associated with gastroesophageal reflux disease (GERD), to treat and maintain the healing of erosive esophagitis and to treat duodenal ulcers. (See BioWorld Today, June 17, 2004.)
The company expects to launch the product in December with its own 230-person sales force. It currently has 63 sales and marketing positions filled.
In the meantime, it is awaiting the FDA's decision on a new drug application submitted in February for a 40-mg dose of the powder version to treat gastric ulcers and to prevent upper gastrointestinal bleeding in critically ill patients. The Prescription Drug User Fee Act (PDUFA) date is scheduled for Dec. 26.
Behind the powder version in development are the company's capsule and chewable tablet versions of Rapinex. All of the products are immediate-release formulations of omeprazole aimed to treat gastrointestinal conditions. They are next-generation proton pump inhibitors that block stomach acid production by inhibiting the hydrogen-potassium adenosine triphosphate enzyme system. PPIs currently are available only for oral use in the delayed-release, enteric-coated formulation.
As of March 31, Santarus had $37.75 million in cash, cash equivalents and short-term investments.