Months after raising $25 million in a private placement, Axonyx Inc. is at it again. But this time, Axonyx has set its sights higher, looking to bring in $50 million.
Axonyx, of New York, needs the extra $50 million to finance its pipeline and possibly to acquire new technologies. Colin Neill, company chief financial officer, told BioWorld Today that Axonyx decided to raise funds because, "the opportunity is now. We can always do with additional cash."
The company has agreements to sell about 9.7 million shares of common stock at $5.15 per share. The agreements involve the acquisition by the investor group of five-year warrants to purchase an additional 2.4 million shares of stock at an exercise price of $7.25 per share.
In September, Axonyx raised $25 million through the sale of about 7.5 million shares at $3.25 each. An investor group also received five-year warrants to buy another 5.6 million shares at $3.50 apiece. Proceeds from that financing were earmarked to bankroll Axonyx's lead candidate, Phenserine, a treatment for Alzheimer's disease. (See BioWorld Today, Sept. 15, 2003.)
At the end of the third quarter, Axonyx had $30 million in cash, 33.2 million outstanding shares and a burn rate of about $6 million per year. (Fourth-quarter and year-end financials have not been released.)
Neill said the burn rate is expected to change as the company moves products forward, particularly Phenserine, a dual action acetylcholinesterase and beta-amyloid precursor protein inhibitor licensed from the Bethesda, Md.-based National Institutes of Health's National Institute of Aging.
It's Phenserine that makes the company so exciting, Neill said.
"There is a disease-modification aspect to the drug," he said. "We think it may address the actual cause of the disease; it may slow it down, retard it or maybe even reverse the progression of Alzheimer's."
Also, the side effect profile might be limited to vomiting, nausea, dizziness and similar conditions.
Phenserine is the subject of a 375-patient European Phase III designed to evaluate two different doses. Meanwhile, a Phase IIb evaluating Phenserine's ability to lower the levels of the beta-amyloid precursor protein and beta-amyloid in the plasma and cerebrospinal fluid in mild to moderate patients is ongoing. (See BioWorld Today, June 27, 2003.)
Neill said Axonyx likely is to seek a commercialization and marketing partner for Phenserine.
Aside from Alzheimer's, Axonyx plans to work on drugs for human memory disorders and prion-based illnesses such as mad cow disease.
Rodman & Renshaw Inc. and Punk Ziegel & Co., both of New York, served as Axonyx's placement agents in the $50 million transaction. Punk Ziegel also acted as the financial adviser.
Axonyx's stock (NASDAQ:AXYX) closed Thursday at $5.60, down 32 cents.