By Matthew Willett
CV Therapeutics Inc. closed a common stock equity financing deal with Acqua Wellington North American Equities Fund Ltd., worth $120 million, that gives the company flexibility and a financial boost as it prepares for commercialization of its arrhythmia and angina products.
Both ranolazine, a partial fatty oxidation inhibitor used against angina, and CVT-510, a selective adenosine A1 agonist designed to treat atrial arrhythmias such as atrial fibrillation, atrial flutter and paroxysmal atrial tachycardias by reducing heart rate, are in Phase III trials.
CEO Louis Lange described the deal as "opportunistic and efficient."
The deal calls for the purchase of up to $120 million of common stock in CVT by Acqua Wellington over the next 28 months at CVT's discretion. The shares will be sold at a small discount.
Proceeds from the sales will go toward commercialization of the company's two late-stage compounds and pipeline advancement of several treatments, including one focused on work with the recently discovered abc1 cholesterol transporter thought to increase HDL, or "good cholesterol," production.
"We're feeling fortunate to be rewarded in the market these days and to have the opportunity to advance all this science into the clinic," Lange said.
"Today on the balance sheet we've got $275 million," he added. "This drawdown time will give us the ability to keep the balance sheet strong, and it means we can run two clinical programs in parallel."
Ranolazine remains on schedule for a new drug application sometime in 2001, Lange said. The anti-angina treatment works by increasing the cardiac energy available by partially shifting from fatty acid to glucose metabolism.
The drug will be marketed and distributed by Innovex Inc., a subsidiary of Quintiles Transnational, of Research Triangle Park, N.C., through a deal signed in 1999 that provides a dedicated sales force for the product. It also allows CVT to acquire that sales force while retaining most of the profits.
The most recent financing could herald a similar deal for the company's anti-arrhythmia drug, CVT-510.
"We haven't decided yet," Lange said. "That could well be what we'll do. Given our balance sheet and this cash we have, we could be flexible."
That strong cash position also gives the company flexibility with its pipeline, which includes a second generation of ranolazine, and the company's strategy with corporate alliances. Lange cited the recently signed deal with Fujisawa Healthcare Inc., of Deerfield, Ill., for distribution rights to CVT-3146 worth $34 million in up-front payment and in milestones as an example of what a strong balance sheet can do.
"It was the balance sheet strength that allowed us to strike a deal with a very handsome $10 million cash up-front payment and $24 million in milestones," Lange said. "Then we'll get a very, very handsome royalty. It's just allowed us to access market leadership with Fujisawa and get another product to market at 25 percent of cost."
CVT currently has 18. 3 million shares outstanding. CVT's stock (NASDAQ:CVTX) closed Tuesday at $57.75, up 75 cents.