Four months after raising $76.85 million in an underwritten public offering, Infinity Pharmaceuticals Inc. went back for a heaping plate of seconds, seeking to raise $150 million by pricing an offering of 5.7 million shares of common stock at $26.33 apiece. (See BioWorld Today, Aug. 10, 2012.)

Infinity granted underwriters a 30-day option to purchase up to an additional 854,538 shares to cover overallotments, potentially generating another $22 million. The offering is expected to close on or about Dec. 18.

On Monday, the Cambridge, Mass.-based biotech reported data at the American Society of Hematology (ASH) meeting in Atlanta from an ongoing Phase I trial of IPI-145 in advanced hematologic malignancies. The oral compound is thought to be the first in clinical development to inhibit both phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma. Preliminary results showed the drug was well tolerated and clinically active in both B-cell and T-cell malignancies, including chronic lymphocytic leukemia, indolent non-Hodgkin's lymphoma, mantle cell lymphoma, Hodgkin lymphoma and T-cell lymphoma. Data also indicated rapid onset of activity, with clinical activity reported for 16 of 19 responders occurring within the first two cycles of treatment.

The same day, the company's shares (NASDAQ:INFI) hit a 52-week high of $27.60 before closing at $27.35, for a gain of $4.83, or 21 .4 percent. The public offering was priced at Wednesday's closing price, a discount of less than 5 percent from the stock's high mark two days earlier. Infinity's shares ascended again Thursday morning after the offering was disclosed, reaching $28.86 before settling at $28.70, for a gain of $2.37, or 9 percent, on the day.

Infinity will use the proceeds to fund research and development, including costs associated with the continuing clinical development of IPI-145, and for other corporate purposes. In its preliminary prospectus supplement filed with the SEC, Infinity reported 39.5 million shares outstanding as of Sept. 30 and $189.4 million in cash and equivalents.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are joint book-running managers for the offering, with BofA Merrill Lynch and Deutsche Bank Securities Inc. acting as co-lead managers and Stifel Nicolaus Weisel acting as co-manager.

After Bumps in Road, Infinity Appears on Course

Infinity has hit some bumps in the road over the past several years, most recently in January, when it shelved development of saridegib (IPI-926), a Hedgehog inhibitor partnered with Mundipharma International Corp., of Cambridge, UK, after interim data from a Phase II trial in pancreatic cancer showed better survival in the placebo arm. (See BioWorld Today, Jan. 30, 2012.)

Mundipharma's alliance with Infinity had generated $50 million in funding in 2009, $65 million in 2010 and $85 million in 2011, so the decision to terminate saridegib's development prompted Infinity to slash head count by 20 percent and the news shook the company's stock.

Infinity subsequently restructured its alliance with Mundipharma and parent company Purdue Pharmaceutical Products LP, of Stamford, Conn., regaining global development and commercialization rights to its PI3K, fatty acid amide hydrolase and early discovery programs. Mundipharma and Purdue are entitled to royalties on product sales for programs previously included in the strategic alliance. Infinity also issued 1.9 million shares of common stock to Purdue Pharma LP, generating proceeds of $27.5 million and giving Purdue a 28 percent stake in the company.

Infinity may now be on the right road with IPI-145, which it acquired from Intellikine Inc. in 2010 for $13.5 million up front plus two years of research funding, $25 million in development milestones and $450 million in regulatory and sales milestones on two product candidates. (See BioWorld Today, July 9, 2010.)

In November, the company reported Phase I data at the American College of Rheumatology-Association of Rheumatology Health Professionals meeting in Washington suggesting IPI-145 was well tolerated and demonstrated favorable pharmacokinetics in inflammatory conditions following administration of single and multiple doses in healthy adults.

The company also reported preclinical data in two models of rheumatoid arthritis (RA), indicating IPI-145 showed dose-dependent activity, inhibiting ankle swelling and protecting bone and cartilage in the joints of diseased animals. Infinity has moved IPI-145 into a randomized, double-blind, placebo-controlled, multidose, crossover Phase IIa study in asthma, and a Phase II study in RA is planned.

The opportunity in hematology could be even greater. Following the ASH presentation, RBC Capital Markets LLC analyst Michael Yee called IPI-145 "one of the star highlights," noting the drug "is clearly efficacious, can work in a broad set of different cancers, is differentiated by hitting PI3k 'gamma' and very importantly, appears tolerable/safe."

He raised the stock's price target from $28 to $32, adding presciently in a company comment, "We think investors will realize this is a potential big drug early on (a rarity in biotech) and there will be more upside."

Jefferies & Co. Inc. analyst Eun Yang agreed in principle but added a hint of caution. In a flash note, she observed that, with respect to pharmacokinetics, "it's unclear whether PI3K gamma inhibition by IPI-145 has meaningful contribution to anticancer activity. Its potential in inflammation could hinge on effective gamma inhibition, requiring higher doses but better safety/tolerability."

Infinity also has retaspimycin hydrochloride, a heat-shock protein 90 inhibitor known as IPI-504. The company has completed enrollment in a randomized, placebo-controlled Phase II trial designed to evaluate the antitumor activity, tolerability and safety of the compound in combination with docetaxel compared to docetaxel alone in patients with second- or third-line non-small-cell lung cancer and a history of smoking. The primary efficacy endpoint is overall survival.

In other financings news:

• K-V Pharmaceutical Co., of St. Louis, received a commitment from lenders led by an affiliate of Silver Point Finance LLC for $85 million in senior secured post-petition debtor-in-possession (DIP) financing, which the company plans to use to satisfy the terms of its settlement agreement with Hologic Inc.. of Bedford, Mass., confirming K-V's continued ownership of Makena (hydroxyprogesterone caproate), to provide financial flexibility during the pendency of its Chapter 11 proceeding and to fund certain payments under a proposed reorganization plan. The DIP financing, Hologic settlement and reorganization plan are subject to approval of the U.S. Bankruptcy Court for the Southern District of New York. The DIP lenders include affiliates or funds of Silver Point, Whitebox Advisors LLC and Pioneer Investment Management Inc. (See BioWorld Today, Aug. 7, 2012.)

• OncoSec Medical Inc., of San Diego, secured agreements with institutional investors to purchase about $7.2 million of securities in a registered public offering. OncoSec agreed to sell an aggregate of 28.8 million shares of common stock at 25 cents each, a 20 percent discount to the stock's closing price on Dec. 12. In addition, the investors will receive warrants to purchase up to 14.4 million shares of common stock at an exercise price of 26 cents each for up to four years. OncoSec plans to use the proceeds to fund clinical trials and research and development and for other corporate purposes. Dawson James Securities Inc. acted as the exclusive placement agent for the transaction, which is expected to close Dec. 17. On Thursday, OncoSec's shares (OTCQB:ONCS) fell 24 percent, closing at 24 cents.

• Sarepta Therapeutics Inc., of Cambridge, Mass., priced an underwritten public offering of 4.95 million shares of common stock at $25.25 each, seeking to raise $125 million. The price, which matched the stock's closing price on Dec. 7, represented less than a 1 percent discount to Wednesday's close of $26.44. Sarepta granted underwriters a 30-day option to purchase up to an additional 742,574 shares to cover overallotments, potentially adding $18.7 million. The offering is expected to close on or about Dec. 18. Sarepta said proceeds will be used to continue development of its exon-skipping compound eteplirsen, which recently reported positive Phase IIb results in Duchenne's muscular dystrophy, and for other corporate purposes. Lazard Capital Markets LLC is acting as sole book-running manager, with Cowen and Co. LLC acting as co-lead manager and JMP Securities LLC, Wedbush PacGrow Life Sciences and Canaccord Genuity acting as co-managers. On Thursday, Sarepta's shares (NASDAQ:SRPT) fell 18 cents, closing at $25.26. (See BioWorld Today, July 25, 2012, and Oct. 4, 2012.)

• Synta Pharmaceuticals Corp., of Lexington, Mass., secured agreements with members of its board and institutional investors to purchase 7 million shares of its common stock in an issuer-directed, registered direct offering. Shares were priced at $8.60, the consolidated closing bid price as of Dec. 12, for gross proceeds of approximately $60 million. No underwriter or placement agent was used in the transaction, which is expected to close on or about Dec. 18. The company plans to use the proceeds to fund research and development, clinical trials and for other corporate purposes.