Financings Roundup
Achillion Pharmaceuticals Inc. plans to raise about $50 million through the sale of stock and warrants to a select group of investors, money that would be used to advance the company's early stage pipeline of drug candidates for hepatitis C virus (HCV).
At the end of June, the New Haven, Conn.-based company had $20 million in cash resources. With the added funds from the financing, which is expected to close Aug. 20, Achillion hopes to extend its cash through most of 2012.
The financing is intended to take the company's ACH-1625 protease inhibitor to the completion of Phase IIa testing, explained Mary Kay Fenton, Achillion's vice president and chief financial officer.
The Phase II study, which is expected to get under way next month, will have a 28-day segment that is targeted to report data in March 2011 and a 12-week segment that is slated to report results at the end of next year.
"We believe this financing will get us through both of those milestones," Fenton told BioWorld Today.
In addition, Achillion hopes to move its preclinical candidates, ACH-2684, a pan-genotypic protease inhibitor, and ACH 2928, an NS5A inhibitor, through Phase I testing in 2011 . The company also plans to put those candidates in combination studies in 2012 with other HCV assets in development, Fenton said.
ACH-1625, while it has shown promising data in Phase Ib studies, is far behind the front runners in the crowded HCV space. Both Vertex Pharmaceuticals Inc. and Merck & Co. Inc. have their own HCV candidates in Phase III, protease inhibitors telaprevir and boceprevir, respectively. Analysts view both drugs as approvable.
The current standard therapy for HCV is a combination of ribavirin and a pegylated interferon. There are no protease inhibitors currently approved for the infection.
Achillion believes its protease inhibitor, though still in early testing, may stand apart from the others because of its safety and tolerability and sustained viral suppression.
"Based on the early Phase Ib data, we view ACH-1625 as a very promising HCV protease inhibitor in early development," Cowen & Co. analyst Phil Nadeau stated in a research note. He added, "We believe the risk/reward of owning ACHN shares at current levels is highly favorable."
In several dosing cohorts, study patients infected with HCV were dosed for five days and showed a mean maximum drop in viral load of between 3.63 and 4.25 logs. All dosing cohorts also showed a sustained viral suppression in HCV-infected subjects, even after dosing was completed.
"This observation could be an important distinguishing feature and competitive advantage for our compound in comparison to other HCV therapies," Elizabeth Olek, vice president and chief medical officer, said in a Thursday conference call.
A select group of investors, namely venture firms Domain Associates, Clarus ventures, Quaker BioVentures and Pappas Ventures, have agreed to purchase Achillion's stock and warrants in the private placement offering.
While the company's focus is HCV, it also has an HIV candidate elvucitabine, an L-cytosine nucleoside analogue reverse transcriptase inhibitor. Earlier this year, Achillion reported 96-week data showing that the drug had a substantial antiviral effect similar to 3TC (lamivudine, GlaxoSmithKline plc), with 95 percent of patients in the elvucitabine-treated group achieving undetectable viral load compared with 93 percent in the 3TC group.
Achillion is offering 19,755, 101 shares of common stock at a price of $2.49 per share, its consolidated closing bid price reported by NASDAQ Aug. 17.
The warrants to purchase 0.35 shares of common stock for each share of common stock are priced at $0. 125 per warrant share. The warrants, which have a seven-year term from the date of issuance, represent the right to acquire an aggregate of 6,921 ,285 shares of common stock and will be exercisable at a price of $3. 1125 per share.
Shares in Achillion (NASDAQ:ACHN) lost 1 cent, closing at $2.60 Thursday.
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