By Randall Osborne
West Coast Editor
Less than a month after letting go 35 percent of its work force because of a holdup in filing a new drug application for its HIV treatment, Coviracil, Triangle Pharmaceuticals Inc. said it has entered into a definitive agreement to raise $75 million in a two-part stock sale.
Under the terms, Triangle will sell 28.3 million shares to Warburg Pincus Private Equity VIII LP, of New York, for $2.65 per share, which will give Durham, N.C.-based Triangle about 78 million shares outstanding, said Robert Amundsen, vice president and chief financial officer.
¿We¿re going to attempt to keep the burn rate down to what we announced, despite getting this money,¿ Amundsen told BioWorld Today. ¿Our goal also was to get two years of cash in the bank, which we haven¿t had in recent years.¿
At the first closing Friday, Triangle sold 9.62 million shares for gross proceeds of about $25.51 million. The second closing for the remaining 18.67 million shares is expected to occur in a little over a month, Amundsen said. Stockholders must approve issuance of the shares.
Triangle has entered into agreements with shareholders owning about 32 percent of the company¿s stock to vote in favor of issuing new shares for the second closing.
Banc of America Securities LLC, of New York, is serving as placement agent.
Earlier this month, after releasing its second-quarter financial figures, Triangle said it aimed to cut monthly spending from $8 million to $5 million through next year, by reducing staff and taking other steps. The moves came as a result of talks with the FDA, indicating data from the FTC-302 Phase III trial of Coviracil, a nucleoside reverse transcriptase inhibitor, probably would not be sufficient to win approval. (See BioWorld Today, Aug. 8, 2001.)
The firm said it would cut 54 full-time jobs and 31 part-timers from its 170-member staff, but would go ahead with Phase III trials of Coviracil in HIV and hepatitis B; Phase III studies of Coactinon for HIV; Phase II studies on amdoxovir (formerly DAPD) for HIV; Phase I and II studies of clevudine (formerly L-FMAU) for hepatitis B; and Phase I studies with an ImmunoStimulatory Sequence drug candidate for hepatitis B licensed from Dynavax Technologies Corp., of Berkeley, Calif.
¿We might need more people, but there¿s no plan to replace the group that left,¿ Amundsen said, noting that the company ended up cutting 85 positions, 25 to 30 of which were contractors.
Otherwise, he said, ¿we¿ll continue the trials. It will be business as usual, and we¿ll try to stick to these cash targets we¿ve set.
¿We¿re pretty high on hepatitis drugs, and we see them as an important part of the portfolio,¿ Amundsen said, but HIV drugs are the main emphasis.
Triangle¿s stock (NASDAQ:VIRS) closed Friday at $3.22, up 60 cents.