By Jim Shrine
Special To BioWorld Today
As the company prepares to introduce its first product to the U.S. market, North American Vaccine Inc. (NAV) reached an agreement with existing shareholders on a $25 million financing.
The Beltsville, Md., company plans a private placement of five-year, secured, convertible debentures with a 4.5 percent coupon rate. The debentures initially will be convertible into common shares at the average closing price for the previous 20 days.
Money raised in the financing will "provide working capital for the company, address product launch and development, and [supply] cash requirements for operations," said Daniel Abdun-Nabi, the company's senior vice president of legal affairs and general counsel.
"The amounts raised in this financing are intended to address our cash requirements, and the company has no present plans for any additional financings," he added.
Buyers of the debentures include BioChem Pharma Inc., of Laval, Quebec (which already owns about 36 percent of NAV's 32 million outstanding shares); company director Phillip Frost, who owns 17 percent of the company; and certain institutional investors.
The financing, subject to definitive agreements, is the company's first since it raised about $86 million in May 1996 by selling convertible subordinated notes. NAV recorded a net loss of about $11 million in this year's second quarter, ending June 30, and reported cash and equivalents of $18.3 million.
President Being Replaced, New CEO To Be Named Soon
NAV also disclosed it is replacing Sharon Mates, who had been president since 1990. Abdun-Nabi said the action was taken as the company moves from its development stages into an operating company. He said the company expects to name soon a CEO who has experience in the pharmaceutical industry. Until that appointment is made, Arthur Elliott, senior vice president of operations and chief operating officer, is acting president.
The company expects a fourth-quarter launch of its lead product, Certiva, a combined diphtheria, tetanus and acellular pertussis (DTaP) vaccine that includes a genetically engineered acellular pertussis component, designed to minimize the side effects of the whole-cell version. It is indicated in infants and children six weeks to seven years of age.
The product is being developed with Abbott Laboratories Inc., of Abbott Park, Ill., and was given FDA approval in July.
Abbott's Ross Products Division will market Certiva to private physicians and U.S. managed-care markets. NAV will sell product to Abbott as well as to government purchasers, such as local and state health authorities and the Centers for Disease Control, in Atlanta.
Abdun-Nabi predicted buyers will find the vaccine "an excellent addition to the market."
Abbott and NAV are developing other combination vaccines, including DTaP-IPV (inactive polio vaccine), DTaP-HIB (Haemophilus influenza type B) and DTaP-IPV-HIB (a combination of the previous two). NAV has received about $16 million in milestone payments from Abbott and may achieve another $26 million, Abdun-Nabi said.
The DTaP-IPV vaccine already is approved in Denmark, Germany, Austria, Finland and Sweden, with applications pending in other European countries. That product is moving into U.S. clinical studies.
Separately, NAV is developing a conjugate vaccine against Group B meningococcal infection with Pasteur-Merieux Connaught, of Lyon, France. Through June 30, the company had received $13 million in the potential $52 million deal.
By itself, NAV is developing a vaccine against group C meningococcal infection. That product is in Phase II studies in the U.K. Also, the company has a group E streptococcus vaccine that has been in Phase I/II studies.
Abdun-Nabi said early results show that the vaccine might be capable of protecting both the mother and infant from strep.
He said NAV wants to partner the group E strep product, but has not decided whether it will collaborate on the group C meningitis vaccine.
NAV's stock (AMEX:NVX) closed Thursday at $11.062, down $0.187. *