Labopharm Inc. has obtained a much-needed $25 million debt refinancing to help continue pushing its tramadol pain product through regulatory processes around the globe.
The Laval, Quebec-based company entered into an agreement with Hercules Technology Growth Capital Inc. that provides $15 million immediately, with an additional $10 million available May 15, 2008, through Nov. 15, 2008. Proceeds will be used to advance the company's pipeline, general corporate purposes and repayment of existing long-term debt.
Labopharm's lead product is its once-daily dose of tramadol, which is formulated with its Contramid controlled-release technology, and designed to allow for less-frequent dosing, as well as reduced side effects. The formulation already is sold in Europe by various partners, including in the five largest markets.
It has had rougher sledding in the U.S., though. Last June, the FDA sent Labopharm a second approvable letter on its new drug application, saying the company failed to demonstrate efficacy due to faulty statistical methodology. That sent Labopharm shares down 51.4 percent. The company appealed that decision, but in November, it said the FDA had rejected the appeal. Labopharm then announced it would continue the appeal process.
The company also recently completed a Phase III study for its once-daily formulation of trazodone, and said it expects to report results in the second quarter of 2008, possibly followed by submission of a new drug application. Also in the works are plans to begin a Phase III clinical study of a twice-daily tramadol-acetaminophen combination formulation, a twice-daily acetaminophen formulation and a misuse-prevention platform.
As of Sept. 30, it reported cash and cash equivalents of about C$9 million. Its shares (NASDAQ:DDSS) closed Friday at 97 cents, up 2 cents.
In other financings news:
AspenBio Pharma Inc., of Castle Rock, Colo., entered into securities purchase agreements in connection with a private placement with a group of existing and new investors. AspenBio will receive approximately $18 million in gross proceeds from the sale of about 2.5 million shares of its common stock. A Dec. 24 closing was expected.
Bioniche Life Sciences Inc., of Belleville, Ontario, has renewed and amended the terms of its long-term convertible debt with Laurus Master Funds. Under the amended note, the company will have a maximum borrowing limit of $5.5 million, vs. a previous maximum of $4 million. The company's capacity to borrow under the note is determined by a formula which measures existing levels of inventory and accounts receivable. If the company maintains its current levels of inventory and accounts receivable, it will have access to the full amended line of credit of $5.5 million.
Cell Therapeutics Inc., of Seattle, has entered into agreements to sell approximately $7 million of its common stock and warrants in a registered offering to institutional investors at the negotiated price of $2.02 per share. Purchasers also will receive warrants to purchase approximately 3.47 million shares of common stock, and the warrants will have an exercise price of $2.02 per share. The warrants will not be exercisable until six months following the closing. The company intends to use the proceeds toward the closing of its purchase of Zevalin from Cambridge, Mass.-based Biogen Idec Inc. and for general corporate purposes. (See BioWorld Today, Aug. 17, 2007.) Rodman & Renshaw LLC acted as the exclusive placement agent for the offering.
Senesco Technologies Inc., of New Brunswick, N.J. closed on an additional $4 million of its previously announced private placements with YA Global Investments LP and Stanford Venture Capital Holdings Inc. Senesco has closed on $7 million of the $10 million private placements of secured convertible debentures and warrants. Each of the next $1.5 million tranches will occur as the company meets certain development milestones. The company said it will use the proceeds to advance its research in multiple myeloma with the goal of initiating a Phase I clinical trial.