By Brady Huggett
Myogen Inc. completed one of the largest rounds of financing by a private company this year, raising $52.4 million in its Series D round, most of which the company will spend on its Phase III program in heart failure.
¿First, we¿ll use the funds for our clinical programs,¿ said William Freytag, CEO and president of Myogen. ¿That will require the lion¿s share ¿ roughly two-thirds of the financing ¿ and the rest to advance our research and development.¿
Denver-based Myogen raised $24 million in two previous rounds ¿ $6 million in its Series A and $18 million in its Series C. Its Series B was not a cash round, Freytag said, but instead was used to acquire technology. (See BioWorld Today, Dec. 15, 1999.)
Freytag commented on the roughness of the financing trail.
¿It was tough; it took longer than we expected,¿ he said. ¿In general, we had good reception, but the difficulty was getting companies to commit. Once we had a good lead like JPMorgan, then it went rapidly. But getting groups to step up and take the lead was a fairly measured process. And the market had a lot to do with that.¿
JPMorgan Partners, of San Francisco, led the round, with New Enterprise Associates, of Baltimore; InterWest Partners, of Menlo Park, Calif.; Adams Street Partners, of Chicago; Pacific Rim Ventures, of Estes Park, Colo.; Sequel Ltd. Partnership, of Boulder, Colo.; CMEA Ventures, of San Francisco; and Montagu Newhall Associates, of London, also participating.
¿The objective was to get enough in the bank so that the next move would be an [initial public offering],¿ Freytag said. ¿We expected to have 24 months of funding and hope that the markets show some signs of life in that time period.¿
Myogen¿s lead product is enoximone, a drug it acquired rights to from Hoechst Marion Roussel AG, now called Aventis SA, in 1998. It is a small organic molecule that increases the force of the heart¿s contractions. Aventis developed both the intravenous formulation ¿ called Perfan IV ¿ and oral formulation of the drug. Perfan IV is designed to treat acute decompensated heart failure and oral enoximone is designed to treat advanced chronic heart failure. Perfan IV is approved in seven European countries and generates about $3 million in annual revenue.
The oral formulation is in Phase III trials now, split into arms titled Emote and Essential. Emote, a randomized, double-blind, placebo-controlled trial, was initiated in June 2000. The Essential trial will track the frequency of hospitalizations and deaths as primary endpoints in 1,400 patients. Patients will receive treatment for 12 months, and the trial will be conducted in North and South America and Western and Eastern Europe.
¿Our first Phase III will be completed near the end of next year,¿ Freytag said. ¿The mortality/morbidity [Essential] trial will be completed three years after we start. This will be a European/U.S. filing and we are doing studies on both continents.¿
Freytag said Myogen will seek a partner for oral enoximone, but not until the trials are nearer to completion. Freytag estimated that oral enoximone could pull in between $400 million and $500 million worldwide in a peak year.
Freytag said the IV formulation is given to severely ill patients to stabilize them, and the oral formulation administered to improving or less-ill patients. Myogen expects to launch the IV and oral formulations simultaneously in the United States.
Myogen entered a co-development and license agreement for Ambrisentan, an endothelin receptor antagonist, with BASF Pharma, of Ludwigshafen, Germany (now Abbott Laboratories, of Abbott Park, Ill.), in November 2000. That product is in clinical trials as well.
¿We are kicking off our Phase II program for that,¿ Freytag said. ¿We are moving that forward in three indications: chronic renal failure, pulmonary artery hypertension and chronic heart failure.¿
At the research level, Myogen has identified two validated targets that may be involved in heart failure, and Freytag said in the next nine to 12 months it should have a ¿good sense for a couple of leads in that area.¿
Myogen, now at 35 employees and looking to add another 20 in the next few months, is ready to push it all ahead, Freytag said.
¿We¿ve been waiting for the financing,¿ he said. ¿It allows us to move forward in earnest now and create value quickly.¿
The $50 million-plus round puts Myogen near the top of 2001¿s private-financing heap, coming in below Biovitrum AB, of Stockholm, Sweden ($130 million); Eyetech Pharmaceuticals Inc., of New York ($108.5 million); Perlegen Sciences Inc., of Santa Clara, Calif. ($100 million); and Syrrx Inc., of San Diego ($54 million), according to BioWorld Snapshots.