By Mary Welch
The Medicines Co. raised $36 million in a private placement to support development and commercialization of its thrombin inhibitor, Hirulog, and its migraine headache drug, IS-159, as well as to acquire and develop additional late-stage products.
Peyton Marshall, chief financial officer of the Cambridge, Mass.-based company, said the financing drew more interest than expected.
"We had substantial demand in excess of what we were seeking," he said. "So we increased the offering, but we're unfortunately not able to satisfy all investor demand."
In February, the company filed its first new drug application (NDA) with the FDA, for Hirulog, an anticoagulant for use in patients with unstable angina undergoing percutaneous transluminal coronary angioplasty. Marketing approval is also sought in Europe. (See BioWorld Today, Feb. 18, 1998, p. 1.)
Hirulog (bivalirudin) is derived from hirudin, a natural anticoagulating enzyme secreted by leeches. The company plans to launch two Phase III trials by year's end in angioplasty and myocardial infarction, Marshall said.
IS-159, a highly selective agonist to the 5-hydroxytriptamine receptors, which are found on the blood vessels and nerve terminals in the brain, was acquired recently from Immunotech SA, of Marseilles, France, a subsidiary of Fullerton, Calif.-based Beckman Coulter Inc. Phase II studies of IS-159 have been completed in Europe for the treatment of acute migraine headache.
"Having just acquired IS-159, we are in the midst of evaluating our clinical plans," Marshall said. "Previous clinical work using the compound for migraine treatment shows a rapid onset of action using a valuable method of administration, which is a nasal administration," he said. "There is some work due to be done there and we're planning to start Phase II trials in the near future."
Marshall said the company expects to go public next year. Meanwhile, it is in negotiations with several other firms to purchase late-stage therapeutics.
Hirulog, a 20-amino acid compound, has had a difficult past. Developed by Biogen Inc., of Cambridge, Mass., Hirulog flopped in Phase III trials when compared with heparin in the entire patient population in reducing complications associated with angioplasty, such as death, myocardial infarction, repeat angioplasty and emergency bypass surgery. Heparin, with worldwide sales of more than $500 million, is the treatment of choice.
Biogen said it was discontinuing development of Hirulog in November 1994. In March 1997, Medicines Co. acquired Hirulog from Biogen for $30 million, including up-front licensing fees and milestone payments. Medicines Co. will also pay royalties on product sales if the drug wins approval.
Calling Hirulog a "fallen angel," Clive Meanwell, president and CEO of the Medicines Co., noted that Biogen's data showed that Hirulog was as "effective as heparin and, in a stratified subgroup of patients, it was more effective." Overall, he told BioWorld Today, the anticoagulant's safety performance bested heparin's, with reduced incidences of bleeding. The drug also was significantly more effective in restoring coronary blood flow following heart attack. (See BioWorld Today, March 26, 1997, p. 1.)
Morgan Stanley Venture Partners, of New York, the venture capital affiliate of Morgan Stanley, Dean Witter & Co., of New York, served as lead investor in the most recent financing. Current investors who participated in this round are E.M. Warburg, Pincus & Co. Inc., of New York; Biotech Growth SA, of Zug, Switzerland, a subsidiary of BB Biotech AG, of Schaffhausen, Switzerland; and Hanseatic Corp., of New York. The first two companies purchased 36 percent of the newly issued shares. The company's management also participated.
New investors include Alta Partners, of San Francisco; affiliates of Moore Capital Management, of New York; and Credit Suisse Asset Management, of Zurich. BancAmerica Robertson Stephens, of San Francisco, acted as the placement agent. *