By Kim Coghill
Aradigm Corp. said it entered a definitive agreement with Acqua Wellington North American Equities Fund Ltd. for an equity financing agreement covering the sale of up to $50 million of its stock over the next 20 months.
Sales of common stock in this financing may be made pursuant to an effective shelf registration previously filed by Aradigm with the Securities and Exchange Commission. Shares will be sold over time, at Aradigm's discretion, with Aradigm controlling the amount and timing of each sale.
Norman Halleen, Aradigm chief financial officer, said if Aradigm sells the shares, proceeds would be used for commercial manufacturing capacity expansion, research and development and general corporate purposes.
Acqua Wellington Asset Management LLC is an adviser to the Acqua Wellington Family of Funds, which targets investment opportunities among mid- and small-cap publicly traded companies in domestic and global markets, and has been active of late in biotech investing.
Aradigm's stock (NASDAQ:ARDM) closed Tuesday at $24, down 56.2 cents.
Incorporated in January 1991, Hayward, Calif.-based Aradigm develops pulmonary drug delivery systems for the treatment of systemic conditions as well as lung diseases. Its principal product is the AERx pulmonary delivery system.
The company went public in 1996 and in April completed a public offering that raised $46 million through the sale of 2.875 million shares. (See BioWorld Today, April 6, 2000.)
And a year before, Aradigm raised $25.5 million in a private placement intended to fund a large-scale 18,000-square-foot clinical manufacturing facility. (See BioWorld Today, March 16, 1999.)
Aradigm has collaborations with several companies, including a $40 million deal with SmithKline Beecham Inc., of London, to develop an inhaled delivery vehicle for morphine. In September, Aradigm initiated a Phase IIb clinical trial of AERx using opioid analgesics. The multicenter trial involves self-administered morphine via inhalation through the AERx system. Patients suffer from pain due to cancer, and the trial is designed to evaluate safety, pain relief, time to pain relief and quality of life. (See BioWorld Today, May 27, 1999; Oct. 2, 1997; and April 6, 2000.)
Aradigm recently completed Phase IIa studies using AERx technology to deliver South San Francisco-based Genentech Inc.'s cystic fibrosis drug, Pulmozyme. (See BioWorld Today, May 27, 1999.)
Halleen said Aradigm received milestone payments for the successful completion of the trial.
And in another collaboration, Aradigm has a $50 million deal with NovoNordisk A/S, of Bagsvaerd, Denmark, to develop an inhaled delivery method for insulin. The product would not only provide a method for diabetics to avoid injecting themselves, but also would offer diabetics better blood sugar control because inhaled insulin is faster acting than injected insulin. (See BioWorld Today, June 4, 1998.)
Halleen said Aradigm anticipates Phase III studies for insulin to begin in the second half of 2001.