Connetics Raises $10M For Psoriasis Drug Launch
By Randall Osborne
Preparing to launch its foam product for psoriasis, Connetics Corp. raised $10 million through a self-managed placement of 2.16 million shares of unregistered common stock with Alta BioPharma Partners LLC.
"This doubles our cash position, and we've got a product that is going to compete in a $200 million mid-potency steroid market," said John Higgins, chief financial officer of Palo Alto, Calif.-based Connetics.
In January, Connetics filed its first new drug application with the FDA for a mousse formulation of betamethasone to treat all steroid-responsive dermatoses, including psoriasis. If approved, it could reach the market early next year. (See BioWorld Today, Jan. 6, 1998, p. 1.)
The product is a stabilized foam formulation of betamethasone 17-alpha-valerate. When applied, it liquefies and remains localized at the disease site. The drug, which Connetics licensed from Soltec Research Pty. Ltd., of Melbourne, Australia, is already on the market in the U.K. for scalp psoriasis and seborrheic dermatitis.
Another mousse product — a high-potency steroid — has been licensed from Soltec and Phase III trials in severe scalp psoriasis will begin this summer.
Connetics, which changed its name from Connective Therapeutics Inc. last May, suffered a setback in August with the failure of its gamma interferon in Phase III trials for the treatment of atopic dermatitis. (See BioWorld Today, Aug. 28, 1997, p. 1.)
The placement puts the company solidly back on track, Higgins said. Phase II trials of another product, ConXn (recombinant human relaxin H2) for sclerodoma, finished last year. Connetics licensed relaxin, like the gamma interferon, from South San Francisco-based Genentech Inc.
"We're preparing for our next study, a large pivotal-stage trial, and we're in discussions with partners for corporate development in Europe and Asia," Higgins said.
Also in development are TCR vaccines (small peptides which make up a segment of the T cell receptor).
"We've got a Phase I [TCR] program for rheumatoid arthritis and a Phase I/II study in multiple sclerosis," Higgins said. "Our plan is to move the programs forward in collaboration with corporate partners."
The details of a prospective deal have not been decided, he added. "There are a couple of ways we can package it up."
Already on the market is Ridaura, a gold salt for rheumatoid arthritis, which Connetics licensed from SmithKline Beecham plc, of London, in 1996. Sales of Ridaura last year totaled $6.8 million.
After the placement with Alta, Connetics has 15.6 million shares outstanding. The company's stock (NASDAQ:CNCT) closed Tuesday at $4.625, down $0.125. *