By Brady Huggett
Triangle Pharmaceuticals Inc., anticipating a new drug application filing for its anti-HIV drug Coviracil, raised $46.2 million through a private placement.
It will sell 7.7 million shares of common stock at $6 per share, with the sale closing three days after the SEC declares the resale registration effective. Triangle's largest stockholder and collaborative partner, Abbott Laboratories Inc., of Abbott Park, Ill., will purchase 1.3 million shares.
Triangle's stock (NASDAQ:VIRS) dipped 6.25 cents Wednesday, to close at $7.687.
Banc of America Securities LLC, of San Francisco, served as placement agent.
"It's very good news," said Robin Fastenau, director of investor relations at Triangle. "It shows great confidence in our company. We thought it would be prudent to go ahead with this private placement because it would give us the cash, give us the resources, needed to get up to an NDA filing."
Triangle, of Durham, N.C., will use the proceeds for general corporate purposes, including the manufacture of drug products, the execution of drug development programs and other commercial development, general and administrative expenditures.
"Basically, we will use it for all the things that go into running a pharmaceutical company that is getting ready to launch a new product," Fastenau said.
As of Sept. 30, Triangle had about $90 million in cash, cash equivalents and investments. Not including the shares to be sold in the private placement, it has 38.3 million shares outstanding, Fastenau said, and is burning around $9 million to $10 million a month.
"It gives us about five months of funding," she said, but mentioned the equity line of credit with Ramius Securities LLC, of New York, as a safety net.
That agreement, announced Nov. 2, states Ramius will provide Triangle with an equity facility commitment of up to $100 million, available for 36 months. Triangle has the right to issue and sell portions of its common stock during sequential 15-day selling periods selected by Triangle, with minimum and maximum drawdown amounts and certain trading volume limitations.
"It's a nice backup to this private placement we just announced," Fastenau said.
Coviracil, formerly known as FTC, is Triangle's lead product. Coviracil is a nucleoside reverse transcriptase inhibitor that Triangle licensed worldwide rights to for the treatment of HIV and HBV from Emory University. In April, the South Africa Medicine Council sent Triangle a letter saying the Phase III trial, called FTC-302, in South Africa should be terminated due to concerns of liver toxicity. Triangle's stock tumbled nearly 34 percent on the news. (See BioWorld Today, April 7, 2000.)
The trial was not terminated, but instead put on hold by the council and also by the FDA, forcing Triangle to stop enrollment. However, the council said Triangle should continue to distribute the medicine to the 468 patients already enrolled, and while it debated making the study nonblinded, the trial finished its run.
The hold merely delayed Coviracil's progress; it didn't kill the drug.
"We just completed 48 weeks of treatment [in South Africa]," Fastenau said. "We will present data from that trial at a scientific conference in Chicago the first week in February."
Fastenau said Triangle plans to submit data from FTC-302 and another Phase III trial, FTC-303, in the United States, to the FDA in the first quarter of this year. If the FDA deems the data sufficient for an NDA filing, then Triangle would begin the filing process. If not, Triangle will move forward with another Phase III, 48-week trial, planned for 100 sites in the United States, Europe and Latin America.
Triangle's pipeline also includes DAPD, for the treatment of resistant strains of HIV, in Phase I/II trials; Coactinon, for HIV, in Phase III; Coviracil for hepatitis B, in Phase III; and preclinical explorations aimed at treating hepatitis C. But for now, it's Coviracil for HIV that Triangle is focusing on.
"The best-case scenario [for filing] is the second half of 2001," Fastenau said. "Worst-case scenario, second half of 2002."