By Matthew Willett

BioMarin Pharmaceutical Inc. joined the Acqua Wellington North American Equities Fund Ltd. financing family Thursday, entering an agreement for equity funding of up to $50 million over the next 20 months.

The deal, typical of an Acqua Wellington financing, calls for shares sold at BioMarin's discretion over the next 20 months at a small discount to market price. It includes an initial purchase of $1 million of common stock by Acqua Wellington.

BioMarin Chief Financial Officer William Anderson said the deal benefits his company both in the flexibility of the financing and the latitude it grants BioMarin in timing the drawdowns.

"We believe that the funding structure of an Acqua Wellington financing arrangement worked very well and matched well with our long-term needs," Anderson said. "We can draw down a series of investments over an extended period of time and on a reliable basis. We didn't want to do a large deal at our current price, but we were willing to do a series of transactions, a series of investments over the next 20 months."

Over time, he said, the financing will work better than a typical private placement or secondary offering. BioMarin's shares (NASDAQ:BMRN) gained 6.25 cents Thursday to close at $12.062.

"On the day we signed the deal our shares were below the initial public offering price, although when we did the earlier discussions it was above it," Anderson told BioWorld Today. "To a certain extent when we were lining up the financing we considered it not independent of the current price, but we can look forward and say that we believe the consistent investment over time will yield the kind of financial results we're looking for."

The financing brings New York-based Acqua Wellington's interest in biotech holdings to well over $850 million.

Since January 2000 Acqua Wellington has committed to stock purchase plans such as the BioMarin deal with biotechs all over the map and throughout the spectrum of therapeutic focus, including Nexell Therapeutics Inc., of Irvine, Calif.; Ribozyme Pharmaceuticals Inc., of Boulder, Colo.; Aviron Inc., of Mountain View, Calif.; Aradigm Corp., of Hayward, Calif.; Aronex Pharmaceuticals Inc., of The Woodlands, Texas; Matritech Inc., of Newton, Mass.; Myriad Genetics Inc., of Salt Lake City; Cytogen Corp., of Princeton, N.J.; Epix Medical, of Cambridge, Mass.; Axys Pharmaceuticals Inc., of South San Francisco; Geron Corp., of Menlo Park, Calif.; CV Therapeutics Inc., of Palo Alto, Calif.; Genelabs Technologies Inc., of Redwood City, Calif.; Ariad Inc., of Cambridge, Mass.; GelTex Pharmaceuticals Inc., of Waltham, Mass.; and Isis Pharmaceuticals Inc., of Carlsbad, Calif.

BioMarin, of Novato, Calif., said the proceeds from the financing will fund operations and capital expenditures and may fund the expense of its clinical development programs.

"Fundamentally, the company has three major programs, all of which we expect will be in the clinic in this coming year, and we believe that this money will go to support those three lead programs," Anderson said. "In particular, our lead program done with Genzyme for Aldurazyme for MPS-1 is in Phase III, and that's an expensive time in a product's life cycle."

Beyond Aldurazyme for the treatment of mucopolysaccharidosis-I (MPS-I), BioMarin's pipeline includes BM102, or rhASB, a recombinant human N-acetylgalactosamine 4-sulfatase, for the treatment of MPS-VI, and Vibriolysin, an enzyme that has demonstrated efficacy related to debridement and wound healing in preclinical studies.

Aldurazyme is in Phase III testing, and is in development in collaboration with Genzyme General, of Cambridge, Mass., and that trial, begun in December, is expected to be completed in the third quarter of this year.

BioMarin and Genzyme entered that collaboration, a 50-50 deal worth about $30 million to BioMarin, in 1998. Genzyme agreed to make an up-front $8 million equity investment in BioMarin, pay $12.1 million upon FDA approval and purchase $10 million in stock when BioMarin completed an initial public offering, which it did in July 1999. BioMarin predicted the downstream revenues from the deal would be between $300 million and $400 million. (See BioWorld Today, Sept. 16, 1998, and July 26, 1999.)