By Mary Welch
InSite Vision Inc. raised $13 million in a private placement, the proceeds of which will be used to fund the clinical trials of ISV-615, a topical eye-drop formulation for the treatment of retinal degeneration.
"We were very excited about the placement and were lucky that, even with the recent downturn in the biotech market, we had no problem executing this offering," said Sandra Heine, InSite's senior director of finance and administration. "Our investors were enthused and willing to do the deal. We didn't have to change any of the terms. This will give us the financial wherewithal to take 615 through Phase II clinical trials before looking at licensing activity."
San Francisco-based Capital Research and Management Co. was the lead investor. Apollo Medical Partners, of New York, also invested. AmeriCal Securities, of San Francisco, acted as placement agent.
The price was based "on average market price," Heine said. The company will disclose the number of shares sold and the exact price at a later time. Before the placement, InSite had 21.2 million shares outstanding.
ISV-615 contains batimastat, a potent metalloproteinase inhibitor that has been shown to block new blood vessel formation associated with retinal degeneration. Formation of new leaky blood vessels is a common problem in a variety of retinal diseases, including diabetic retinopathy and age-related macular degeneration (AMD). Many of these diseases can lead to blindness.
The Alameda, Calif.-based company also filed an investigational new drug (IND) application several years ago for ISV-615 for an indication known as pterygium, a vascular growth that develops in the front of the eye, often in those living around the Equator.
"We are meeting with regulatory authorities to see whether we have to file a new IND for a different indication or whether we can simply amend the original indication," Heine said. "We expect to do that later this year."
InSite is hoping to put ISV-615 into Phase I trials first for diabetic retinopathy and then AMD.
The new funding will also help the company take ISV-401, an antibiotic, into Phase I trials sometime next year, Heine said. The company expects to file an IND late this year or early next year.
ISV-401 is a widely used unnamed antibiotic that InSite is in the process of licensing for opthalmology applications.
"This is a well-known antibiotic that has never been used for ophthalmic uses before," Heine said. "We believe that it may be useful in treating infections and possibly preventing post-operative infections. In preclinical tests, it demonstrated effectiveness in both gram-negative and gram-positive bacteria. It may prove to reduce the frequency of dosing seen in other topical ophthalmic antibiotics. If we can significantly decrease dosing frequency, patients may be more apt to use the product."
InSite ended 1999 with net revenues of $4.8 million and a net income of $1.1 million. As of Dec. 31, it had $6.7 million in cash.
InSite's stock (AMEX:ISV) closed Wednesday at $5.75, up 56.25 cents.