By Karen Young
ConjuChem Inc. entered into an agreement with Baker/Tisch Capital, securing C$30 million (US$19 million) of financing via a convertible note.
The convertible note will have a seven-year term and will carry no interest for the first two years, then accrue 7.07 percent annual interest for the following five years. At its option, New York-based Baker/Tisch can convert the debt into common stock at a price of C$5.31 per share. The financing, subject to regulatory approval, is expected to close by Jan. 7.
ConjuChem¿s stock (TSE:CJM) gained C10 cents Friday to close at C$5.90.
¿One of the strategic rationales for doing the financing is that we wanted to put the company in a strong position for multiple partnering negotiations,¿ ConjuChem President and CEO Robert DuFresne said. ¿Also, because our key financial objective for the company is at the appropriate time, probably the latter part of 2002, to do a major public offering that will bring us a U.S. exchange listing.¿
DuFresne said Montreal-based ConjuChem is ¿fairly well capitalized¿ within the Canadian biotech industry, with about C$40 million cash on hand.
¿That means about two years worth of burn rate,¿ he said.
The company is built on its Drug Affinity Complex (DAC) technology, which is a platform for developing long-acting therapeutic compounds. DAC is based on the development of specialized drug constructs, each of which has three parts: a drug component responsible for the biological activity, a connector attached to the drug component and a reactive chemistry group at the opposite end of the connector.
ConjuChem¿s two lead products are DAC:Opioid, for the treatment or prevention of moderate to severe pain, and DAC:TI, a thrombin inhibitor designed to prevent localized blood clotting.
DAC:TI is being looked at in kidney dialysis patients with arteriovenous shunts who are at risk of developing blood clots. A Phase I trial was completed in April, and a Phase II is scheduled to begin shortly, DuFresne said.
ConjuChem has several ongoing Phase II trials for DAC:Opioid, DuFresne said.
In mid-2002, the company expects to be in Phase I/II trials for a third compound, GLP-1 (Glucagon-Like Peptide) for Type II diabetes.
¿It is a naturally occurring hormone in the body that has a very attractive profile in terms of potential treatments of Type II diabetes,¿ DuFresne said, noting that the DAC formulation increases the half-life of GLP-1 from five to six minutes to a half-life of 19 to 20 days. Dosing could be required as infrequently as once a week to once a month, he said.
ConjuChem said it has numerous early stage research collaborations with both pharmaceutical and biotechnology companies.