Enabling IntraBiotics Pharmaceuticals Inc. to ramp up its clinical programs for iseganan, the company raised $39 million gross in a public stock offering Wednesday.
The Palo Alto, Calif.-based company offered 3 million shares at $13 per share. The company's stock (NASDAQ:IBPI) fell $1.28 Wednesday to close at $13.02.
The net proceeds, estimated to be about $36.1 million, will go toward conducting clinical trials, research and development and general corporate purposes. IntraBiotics also might use a portion of the proceeds to acquire or invest in complementary businesses, products and technologies.
IntraBiotics is developing antimicrobial drugs that overcome problems of multidrug resistance. It has the drug iseganan in the clinic for two indications. The FDA granted fast-track designation for the development of iseganan to prevent ventilator-associated pneumonia (VAP). Iseganan also is being studied in lung infections associated with cystic fibrosis (CF).
"We are already more than halfway complete with the first VAP-prevention trial, so we can now do the second, and we can do two Phase II trials in CF, and we can fund operations through 2006," IntraBiotics President and CEO Henry Fuchs told BioWorld Today. "So it extends our runway for 24 months of capital."
The company granted underwriters an overallotment option to purchase up to 450,000 additional shares of common stock. New York-based Deutsche Bank Securities Inc. and Piper Jaffray & Co., of Minneapolis, are acting as co-lead managers of the offering. Lazard Freres & Co. LLC, of New York, is the sole co-manager.
IntraBiotics expects to have 10.1 million shares outstanding following the offering. IntraBiotics has established a special protocol assessment (SPA) in collaboration with the FDA, detailing a pivotal trial design for the VAP indication that would support registration if the trial is successful. The SPA requires two identical pivotal trials.
A Phase I/II trial in 42 patients on life support showed iseganan was safe and resulted in several-100-fold reductions in levels of microbes in the mouth. The two identical pivotal trials each will enroll about 900 patients, with the primary endpoint being the occurrence of VAP. The first trial began enrolling patients in September and has more than 450 patients enrolled to date. Data are expected later this year.
Worldwide, more than 1 million patients each year are at risk of developing VAP, which is caused by aspiration of infectious microbes into the lungs of ventilated patients. There are no drugs approved for its prevention.
"VAP is the most common infection in intensive-care units," Fuchs said.
In CF, IntraBiotics has conducted four Phase I studies in 41 healthy human volunteers and 81 adult CF patients. The company designed the Phase II study in collaboration with the Cystic Fibrosis Foundation. A main treatment for CF today is tobramycin solution for inhalation (TOBI), which had annual sales of about $170 million worldwide in 2003, according to IntraBiotics' prospectus. However, due to resistance to TOBI the drug must be administered intermittently with 30-day breaks, allowing microbes to re-accumulate in the patients' lungs. IntraBiotics said iseganan offers an attractive treatment option because of its low propensity to engender resistance.
About 30,000 people in the U.S. have CF, a condition in which patients develop chronic, progressive infections in their lungs, beginning in infancy. The median survival of CF patients is 33 years.
Iseganan is a synthetic protegrin - an antimicrobial peptide - analogue that IntraBiotics has optimized to enhance its microbe-killing activity.
IntraBiotics holds worldwide commercial rights to iseganan in all indications, and its key U.S. patents covering the composition expire in 2015.
Aside from iseganan, IntraBiotics is working at the preclinical stage to find therapies for ear infections, skin infections and vaginitis, Fuchs said.