Just three days after the FDA accepted the Riquent new drug application for review, La Jolla Pharmaceutical Co. conducted a public offering to raise about $27.4 million.
Pacific Growth Equities LLC, of San Francisco, is serving as underwriter for the offering. It has a 30-day option to purchase 1.3 million more shares to cover overallotments.
The San Diego-based company sold almost 8.7 million shares at $3.15 each - a small discount to La Jolla's recent closing stock prices. The stock (NASDAQ:LJPC) rose 1 cent Friday to close at $3.27.
The company submitted the NDA for Riquent in December as a treatment for lupus patients at risk of renal disease. The product is designed to reduce the levels of antibodies to double-stranded DNA believed to be responsible for lupus renal disease, which often causes sickness and death. Riquent has orphan drug designation in the U.S. and Europe. Last week, La Jolla announced that the FDA accepted the NDA for review.
Steven Engle, chairman and CEO of La Jolla, said the company waited for the acceptance before going forward with Friday's offering.
"We're a biotech company and we want to make sure we have funds to take us through the review process," Engle told BioWorld Today.
Riquent missed its primary endpoint in two Phase III trials, but it showed positive trends, prompting the company to begin filing an NDA last May following discussions with the FDA.
Phase III data from a year ago showed Riquent did not demonstrate a statistically significant increase in time to renal flare. The news caused the company's stock to drop 72.5 percent. However, the trial did show positive trends in the intent-to-treat population. There were fewer renal flares and major systemic lupus erythematosus flares in Riquent-treated patients compared to placebo-treated patients. (See BioWorld Today, Feb. 19, 2003.)
With the FDA accepting the NDA for review, the company could get a decision this year on whether it can market the drug.
"We think that we're currently on the standard 10-month [Prescription Drug User Fee Act] process," Engle said.
Best-case scenario, the company could gain approval as early as October and Riquent could be launched in 2005, Engle said.
"There are no guarantees," Engle said, but at least it appears that all of the data required are in the NDA filing and the process can move forward.
The company restricted its comments due to SEC-imposed quiet-period rules, but Gail Sloan, the company's senior director of finance and controller, said the company intended to use proceeds to fund research and development of potential products, to expand and validate existing facilities and processes and infrastructures, and for other general corporate purposes.
The company's last public offering was conducted in August, when it raised $22.4 million. (See BioWorld Today, Aug. 8, 2003.)
Following the offering, La Jolla will have 59.8 million outstanding shares. For 2003's third quarter, the company reported a $6.9 million net loss - 15 cents per share. At that time, it had cash, cash equivalents and short-term investments of $39.3 million, which included proceeds from the August public offering. Assuming it would have no significant clinical trials or commercialization costs, the company has enough money to cover its expenses through the beginning of the fourth quarter of this year, Engle said.
The company's Toleragen drug candidates are designed to inactivate targeted B cells, stopping them from producing disease-causing antibodies. In addition to Riquent, the company is studying LJP 1082 in a Phase I/II trial for antibody-mediated thrombosis. Data released last October showed that circulating antibodies from treated patients bound to LJP 1082 in a dose-dependent manner.