By Randall Osborne
As it finishes the previously announced acquisitions of two other pharmaceutical companies, Panax Pharmaceutical Co. Ltd. said it has raised about $32.6 million from a private placement and stock subscriptions, has changed its name, and will move to the Philadelphia area.
New York-based Panax said $17 million worth of stock subscriptions have been accepted and the initial closing has been completed on $15.6 million in a private placement of unregistered common stock. Closing on the subscriptions is expected later this week.
Panax has acquired CorBec Pharmaceutical Inc., of West Conschohocken, Pa., and Sangen Pharmaceutical Inc., of Philadelphia. The CorBec purchase was contingent on the merger with Sangen, under the terms of which Sangen shareholders received a combination of Panax stock and warrants totaling 2.35 million shares. (See BioWorld Today, Jan. 29, 1997, p. 1.)
Under the terms of the CorBec deal, CorBec shareholders received an up-front payment of $750,000 and 750,000 shares of Panax stock.
Panax has changed its name to InKine Pharmaceutical Co., said Taffy Williams, president and chief operating officer. He was president and CEO of Panax. The company begins trading today under the name of InKine (NASDAQ:INKP).
A site near Philadelphia has been chosen for InKine, but the lease has not been signed, Williams said. "We hope to be down there by the end of December." The new company will have about 10 employees, but no layoffs will be necessary from the two acquisitions since they were "mostly virtual," Williams added.
Merged Firms Have Late-Stage Drug Candidate
InKine has one product in Phase III trials: CBP-1011, an orally administered glucocorticoid analogue that was being developed by CorBec. It is used for the treatment of idiopathic thrombocytopenia purpura (ITP). The product, given orphan status by the FDA, is targeted for a platelet disorder that can cause uncontrolled bleeding and afflicts an estimated 100,000 patients in the U.S.
"We think CBP-1011 can be used instead of prednisone, but without the side effects," Williams said. The Phase III trial is under way at more than 10 sites, with 100 patients enrolled. The endpoint is the increase of platelet counts by at least 20,000.
A Phase III trial will begin in the next few weeks for InKine's other lead product, an anhydrous sodium phosphate tablet used for colonic cleanings prior to colonoscopy, which was developed by Panax.
InKine estimates that, by 2000, there will be 10 million potential users of the tablet, which is more palatable than currently used liquid purging agents, Williams said.
"We've got what I would call an arsenal," Williams said. "It's our hope that we can complete a new drug application within a year and half on both drugs."
As a result of the financing, InKine has enough money to operate for more than two years, Williams said. He estimated the cost of the Phase III studies at $4 million.
Institutional investors taking part in the financing are Biotechnology Development Fund LP, of Palo Alto; Veron International Ltd., of the British Virgin Isles; Oxford Bioscience Partners II, of Stamford, Conn.; and Bankers Trust Co., of New York.
Placement agents in the $17 million financing were Aurora Capital Corp. of New York; Sunrise Securities Corp., of New York; and Shipley Raidy Capital Partners LP, of Philadelphia.
As of June 30, the end of its fiscal year, Panax had $1.17 million in cash, with a net loss of $1.65 million.
Panax's stock (NASDAQ:PANX) closed Tuesday at $2.437, down $0.031. *