Washington Editor

A week after initiating a Phase IIa study of its chronic hepatitis C virus (HCV) drug PSI-7977, Pharmasset Inc. priced a public offering of 1.6 million shares of its common stock at $18.75.

Pharmasset said in its prospectus that it plans to use the expected net proceeds of $28.6 million, or $32.7 million if the underwriter exercises its full option to purchase 230,400 additional shares, to fund its clinical trials and in-licensing agreements for product candidates or additional technologies and complementary business asset acquisitions.

Investors showed scant reaction Thursday, sending shares of Princeton, N.J.-based Pharmasset (NASDAQ:VRUS) up only 14 cents, to close at $20.06.

Leerink Swann LLC served as sole book-running manager for the offering, which is expected to close Feb. 2.

Pharmasset focuses on developing nucleoside and nucleotide analogue oral therapies for viral infections, such as HCV and HIV. The company's 28-day Phase IIa study of PSI-7977, a nucleotide analogue polymerase inhibitor, is evaluating various doses of that drug in combination with Genentech Inc.'s Pegasys (peginterferon alfa 2a) and Copegus (ribavirin) in patients with HCV genotype 1 who have not been treated previously.

The trial is expected to enroll about 60 patients. The primary efficacy endpoint of the Phase IIa study is the proportion of patients who achieve a rapid virologic response of undetectable levels of HCV four weeks after the initiation of treatment.

Pharmasset also is developing RG7128 (formerly R7128), a first-generation HCV nucleoside polymerase inhibitor, under a collaboration with Basel, Switzerland-based Roche AG, which is conducting a Phase IIb trial of the drug in combination with Pegasys plus Copegus.

That trial is expected to complete enrollment of the second cohort of 300 patients in the first quarter, Leerink Swann analyst Howard Liang said in a research note earlier this month.

The data from the first cohort of 100 patients, however, are not likely to be presented before the full data, which are expected in 2011, Liang added.

Roche recently completed INFORM-1, a Phase I study designed to investigate the combination of Roche's and InterMune Inc.'s R7227, an oral NS3 protease inhibitor, with RG7128. (See BioWorld Today, April, 28, 2009.)

Results announced in November of the completed final three cohorts of the INFORM-1 study showed that the full-dose combination of RG7128 1,000 mg and RG7227 900 mg administered twice daily without pegylated interferon or ribavirin for 13 days resulted in 88 percent of HCV-positive treatment-naive patients achieving HCV RNA below the lower limit of quantification (LLOQ) and 63 percent of patients having HCV RNA below the lower limit of detection (LLOD).

The same regimen in null responders resulted in 50 percent of patients with HCV RNA below LLOQ and 25 percent of patients with HCV RNA below LLOD. Null responders were defined as patients with an HCV RNA reduction of below 1 log10 IU/mL in four weeks or below 2 log10 IU/mL in 12 weeks of prior treatment with pegylated interferon and ribavirin.

At the daily dosages of 600 mg of RG7227 in combination with 1,000 mg of RG7128 for 13 days in treatment-experienced patients, somewhat lower viral load reduction and categorical responses were observed, an observation that the firms said would guide dosing in future studies.

Pharmasset's pipeline also includes Racivir, an investigational treatment for HIV in combination with other approved HIV drugs. That drug has completed a Phase II trial.

The company also recently nominated PSI-938 and PSI-879 as third-generation nucleotide candidates for the treatment of HCV, which Pharmasset said potentially could be used in combination with RG7128 or PSI-7977.

In other financings:

• Resverlogix Corp., of Calgary, Alberta, said it has completed a C$8 million (US$7.5 million) second tranche of its equity private placement announced last month, issuing about 3.19 million common shares and reservation of a further 797,313 common shares under the warrants at a price of C$2.50 per unit.

• Sinovac Biotech Ltd., of Beijing, said it priced its public offering of 10 million common shares at $5.75 per share. Sinovac has granted the underwriters a 30-day overallotment option to purchase up to an additional 1.5 million common shares on the same terms and conditions. Sinovac said it expects net proceeds of about $53.8 million, or $62 million if the underwriters exercise their overallotment option in full. The offering is expected to close Feb. 2.

• SymBio Pharmaceuticals Ltd., of Tokyo, said it completed a $7.7 million second tranche of its Series D round of financing with third-party allocation of 11,467 shares. The firm said oversubscription of its initial Series D round of 25,000 shares, resolved at an extraordinary shareholders' meeting held Aug. 21, 2009, led to the Series D extension in fundraising, bringing the total money raised to $24.4 million.