AlgoRx Pharmaceuticals Inc. intends to use proceeds from its $65 million Series C financing to bankroll ongoing development of its two lead Phase II drug candidates.
Located in Cranbury, N.J., AlgoRx is a development-stage company focused on building a portfolio of drugs and technologies for the pain management market.
Since it was founded in 2001, the privately held firm has raised $89 million: $9 million in its Series A, $15 million in its Series B and the Series C round, which is led by Advent International Corp., of Boston. Following the financing, Charles Cohen, a partner at Advent, will join AlgoRx's board.
While Jeff Rona, AlgoRx's chief financial officer, wouldn't discuss specifics about the firm's finances, he did say the Series C should take the company through the next two-plus years.
He said AlgoRx officials believe they've tapped into a high-quality group of investors.
"We definitely believe this validates the company's products and its business platform," he said.
The company's lead pain products are ALGRX 3268 and ALGRX 4975. Rona said the firm is particularly excited about 4975 (capsaicin for injection), which is expected to enter Phase III trials in 2005 for post-surgical pain. Recently the candidate was the subject of two positive Phase IIa studies and is expected to be evaluated in other Phase II trials this year.
AlgoRx plans to study 4975 in a several areas, including osteoarthritis, tendonitis and localized neuropathic pain and post-surgical conditions such as bunionectomy, knee-replacement surgery and sternotomy. The candidate was in-licensed in August 2001 from Johns Hopkins University in Baltimore.
Meanwhile, AlgoRx's other top product, ALGRX 3268, is nearing the end of Phase II development. The candidate is a needle-free, pain-free epidermal injection of lidocaine powder that provides local anesthesia for needle or catheter insertion. AlgoRx expects to file a new drug application by the end of 2005.
While adult populations likely could get use out of 3268, Rona said the company believes the candidate largely will be used in pediatric patients.
The potential U.S. market is believed to be about $100 million or more.
AlgoRx acquired 3268, also called PowderJect Lidocaine, via its March 2002 purchase of Oxford, UK-based PowderJect Pharmaceuticals plc's drug business. (See BioWorld Today, March 19, 2002.)
Also as part of that acquisition, AlgoRx gained access to PowderJect's needle-free delivery system for uses outside the vaccine arena. That technology involves the acceleration of dry, solid-powder formulations of medicines to high speed, using a transient high-velocity helium gas jet, for injection into any accessible tissue.
PowderJect has since been bought by Chiron Corp., of Emeryville, Calif., in a deal valued at $880 million when it was announced in May. (See BioWorld Today, May 20, 2003.)
Existing investors participating in the Series C round, which was oversubscribed, are InterWest Partners, of Menlo Park, Calif.; JPMorgan Partners LLC, of New York; and Sofinnova Ventures, of San Francisco.
New investors included S.R. One Ltd., of New York; Pacific Rim Ventures Co., of Tokyo; Index Ventures, of Geneva; Lehman Bros. Healthcare Fund, of New York; Hunt Ventures LP, of Dallas; EGS Healthcare Capital Partners LLC, of Rowayton, Conn.; Piper Jaffray Ventures, of Minneapolis; NIF Ventures Co. Ltd., of Palo Alto, Calif.; Axiom Venture Partners LP, of Hartford, Conn.; Cogene BioTech Ventures Ltd., of Houston; and William Harris Investors Inc., of Chicago. Aquilo Partners Inc., of San Francisco, acted as placement agent in the transaction.