By Brady Huggett
EpiCept Corp. closed a $13.4 million Series C private placement last week, and its CEO, John Lucas, who was whiling away his days serving as a director of Sequenom Inc. when he accepted the offer to become CEO of the pain-management company EpiCept, said the next step is turning public.
"This is our pre-IPO round," Lucas told BioWorld Today. "I thought I had retired, but this is fun. I'm having a ball and it's a great little company."
The financing was led by Merlin Biosciences, of London, with Gold-Zack AG, of Frankfurt, Germany, and Bank Vontobel, of Zurich, Switzerland, also participating. Existing investors again contributing were Techno Venture Management, of Munich, Germany; Alpinvest International BV, of the Netherlands; and Kredietrust Luxembourg, of Luxembourg.
Lucas said EpiCept, of Englewood Cliffs, N.J., would use the proceeds to intensify its intellectual property portfolio and to pay for the costs of clinical studies that should soon commence at EpiCept. It has about $12.5 million on hand at the moment after making some up-front manufacturing payments, and Lucas said the company expects to burn about $500,000 a month in the future.
"We have two years of cash unless we do something dramatic," he said. "We are heading for an IPO, but this is my seventh company and I know how to get it on track for that. I am looking at bulking the thing up, either by merging with another early stage company that is well financed or by picking up a smaller company that lacks either funding or management or both. We are aware of some groups that have some topical products that are compatible with ours. Some are out in the boondocks and don't know how to raise money or don't have the track record."
EpiCept's technology is built on patches. It was founded in 1993 by Rainer Liedtke, the first person to implement topical products that are normally used systemically, Lucas said. Using lidocaine, Liedtke put a pain-fighting patch on the market in Germany and pain therapies remain EpiCept's focus today.
It has a LidoPAIN HM topical patch for the treatment of headache and migraine; LidoPAIN SP, a sterile wound bandage or patch that releases anesthetic to a post-surgical wound or post-traumatic wound; and LidoPAIN BP, a patch for back pain. There also is a patch, LidoPAIN TV, for treating tinnitus and vertigo, in the works.
EpiCept is working with Memorial Sloan-Kettering Cancer Center, of New York, on an opioid-lidocain combination spray for oral mucositis and is collaborating with Epitome Analgesics Inc., of Halifax, Nova Scotia, on an amitriptyline/ketamine ointment. Also, it is working on a product called OTC patch for insect bites.
"The three lidocaine patches [HM, SP and BP] are the furthest along," Lucas said. "We will be through Phase II/III by the first quarter of next year." Lucas added that EpiCept will have filed new drug applications for the three patches, the spray, and the ointment by the first quarter of next year.
Working with lidocaine has its advantages.
"We don't have a Phase I because all of our products are topical," Lucas said. "Lidocaine has been around since 1949 and the only thing the FDA asks us for is skin irritation studies. The beauty of this company is that we aren't putting the drug into the bloodstream. And the FDA really likes us because the idea of substituting something for systemic morphine is very appealing to them."
EpiCept employs 11 people in Englewood, another six at its subsidiary, EpiCept GmbH in Munich, and Lucas said it should be hiring more soon. After working for six other companies, Lucas is enjoying his time with EpiCept.
"There were no e-mail and no cell phones back when I was doing this before," he said. "The great thing about this job is I deal more with what is outside the company than what is inside. More than half of my daily dealings are with Europeans and they go home at noon. So then I go get some coffee and get in front of the computer."