The company formerly known as Exhale Therapeutics Inc. has acquired a new name, a new financing and new U.S. rights to a pulmonary hypertension product.
The new name is CoTherix Inc. and comes with a change in management structure, as well as a $55 million Series C financing. In addition to the financing, the company announced Tuesday its acquisition of U.S. development and marketing rights to Berlin-based Schering AG's Ventavis to treat primary pulmonary hypertension.
"This really comes down to a launch of a new company," said Scott Harkonen, the Belmont, Calif.-based company's CEO and chairman, adding that the "new" company has "a very promising late-stage product" from Schering, one of the year's largest financings and "a strong experienced management team that has a track record of commercializing products and building value."
As part of the company's restructuring, Harkonen stepped in as CEO, adding to his position as chairman. Donald Santel, president and CEO of Exhale since April 2001, took the positions of president and chief operating officer with the new company. Exhale was founded in February 2000.
Harkonen said about two-thirds of the $55 million raised will go toward the commercialization of Ventavis, while the other third will go toward additional acquisitions of products.
"We're looking at a number of opportunities," he told BioWorld Today. "We believe our main focus right now will be in the pulmonary space, infectious disease and possibly oncology."
Financial terms of the deal with Schering were not disclosed, but CoTherix will be responsible for any regulatory fees or clinical trials to be done in the U.S., and it will pay Schering a royalty on any sales following a launch. Harkonen said a launch could occur as early as the first quarter of 2005 or as late as the first quarter of 2006. Sales of Ventavis could reach $110 million in the U.S. about three to four years following a launch, he said.
"One big variable in the company's plan now is what kind of trials, clinical trials, if any, we need to do to bring Ventavis to the market here in the U.S.," Harkonen said. "Our plan in our budgeting is that additional clinical trials will be required in the U.S."
CoTherix officials will meet with the FDA by the end of the year to determine the steps it must take to gain approval.
Ventavis was approved last month in Europe and is currently being launched there by Schering. CoTherix is building a U.S. commercial field force to market the product, which is a prostacyclin that targets the pulmonary vessels directly by inhalation. A European Phase III trial comparing it to placebo showed it achieved the primary endpoint of improvement in exercise capacity and functional class. It was highly statistically significant, Harkonen said, with a "p" value of 0.007.
"It's an inhaled prostacyclin - our competition is administered either by continuous subcutaneous infusion by a pump or by a central line that has to be placed by a surgeon," Harkonen said. "We believe the aerosolized version offers a lot of convenience as well as safety and efficacy with pulmonary hypertension."
Pulmonary hypertension is a disease of the blood vessels in the lung in which the pressure in the pulmonary artery is significantly higher than normal. About 50,000 Americans are affected with either primary pulmonary hypertension or secondary pulmonary hypertension.
Investors in CoTherix's financing were: MPM Capital, of Boston; Sofinnova Partners, of Paris; Frazier Healthcare Ventures, of Seattle; Thomas Weisel Healthcare Ventures, of San Francisco; Alta Partners, of San Francisco; BioAsia Investments, of Palo Alto, Calif.; Sofinnova Ventures, of San Francisco; and Spray Venture Partners, of Boston. Nick Simon, a general partner with MPM Capital, is joining CoTherix's board.
Before joining CoTherix, Harkonen served as founder, president and CEO of InterMune Inc., of Brisbane, Calif., a company that during his tenure grew from $4 million to $112 million in sales and in-licensed five late-stage products. Harkonen also served as senior vice president of product development and operations at Connetics Corp., of Palo Alto, Calif. He is a member of the Biotechnology Industry Organization's board of directors.