By Brady Huggett
Access Pharmaceuticals Inc. raised $13.5 million in a convertible note offering with three investors, and said the money puts the company in a good position for partnerships.
"This puts us in a very flexible position in terms of our partners," said Kerry Gray, president and CEO of Access. "Now we won't be forced into a partnership at an inappropriate time."
Investors were Oracle, which is already a significant shareholder in the company, new investor Philip Kaltenbacher, and an unnamed silent partner.
The five-year convertible note has a fixed conversion price of $5.50 and is not convertible for 12 months. Access's stock (AMEX:AKC) gained 12.5 cents Wednesday to close at $5.25. It has traded from $1.125 to $15 over the past 52 weeks.
With the $13.5 million, Access, of Dallas, has a cash position of $27.1 million, money that Gray said is sufficient to fund operations for four years. One product Access has in Phase II/III clinical development is ResiDerm A, a topical delivery system that uses zinc ion technology and has completed Phase III trials. ResiDerm A is zinc combined with clindamycin for the treatment of acne and is being developed by UK-based Strakan Ltd.
But Gray said the future might be brightest with Amlexanox, the product approved for canker sores by the FDA and in Phase II/III trials for mucositis.
"I think the big opportunity is in the Amlexanox with mucositis, and this funding will allow us to take that into Phase III," Gray said. Mucositis is an ulceration of the oral mucosa that occurs in patients undergoing radiation for head and neck cancer.
Access plans to begin Phase II trials of up to three additional products in the upcoming nine months, and anticipates growing its product portfolio.
"For a company our size, we have a very advanced and full product development pipeline and this money will allow us to rapidly develop it and enhance it," Gray said. "We are now looking at four products in clinical development. [The money] will put other product opportunities in behind it."