Washington Editor

BioVascular Inc. raised $10.87 million in Series C financing to support the clinical development of Saratin, a polypeptide that is derived from leech saliva, and BVI-007, a thrombopoietin antagonist that reduces platelet production.

The San Diego-based company has raised a total of $18.87 million. BB Biotech Ventures of Zurich, Switzerland, led the financing, with previous investors Germany-based Merck KGaA and Princeton, N.J.-based Domain Associates LLC joining the round.

BB Biotech partner Martin Munchbach will join BioVascular's board of directors.

CEO John Parrish said Domain and Merck, two firms he previously had as investors in other companies he founded, both recommended BB Biotech as an investor.

"We had a number of meetings with them, and they did a lot of due diligence," he told BioWorld Today. "We are pleased to have them as investors. We think they are a value-added investor and will be very good."

The Swiss firm, which is the biotech venture arm of Bellevue Asset Management AG, a multibillion dollar fund, is a good fit as an investor for BioVascular, Parrish added, because of his company's connection to Europe.

"This company has a bit of a European flavor," he said, noting that Saratin originally was developed in Europe by Merck and currently is being tested in two Phase I/II clinical trials there for vascular graft failures due to intimal hyperplasia, the thickening of a blood vessel in response to an injury.

The first Phase I/II study, which involves patients undergoing hemodialysis vascular access graft surgery, has completed enrollment, Parrish said, noting that the firm anticipates having three-month data in the near future and six-month data in late spring.

The second Phase I/II trial, which involves patients with peripheral arterial disease undergoing bypass graft surgery, has enrolled half of its planned 100 patient population, Parrish said.

BioVascular anticipates starting a Phase II study of Saratin in the U.S. later this year, he noted, adding that the firm expects to initiate pivotal Phase III trials of the compound in the U.S. and Europe in late 2009. BioVascular's European Phase Ib dose-escalation study of BVI-007, a compound that acts to reduce platelet production without affecting platelet function, is expected to be completed in late spring, Parrish said.

Data from the Phase Ib study, which involves six cohorts of eight patients each, is expected in June, Parrish explained.

BioVascular acquired the worldwide rights to BVI-007 last fall when it merged with Oregon-based Revitus.

The $10.87 million is "enough money to last about a year," Parrish said, and "takes us to the point that we get some clinical data on Saratin and we get the [Phase] Ib efficacy data and understand the regulatory path on the BIV-007."

"We have these two products that are first-in-class cardiovascular therapeutic compounds, we think a very good management group that has experience and can execute on this plan, a great board of directors who are very supportive of us, both in advice and financially, and we are just marching down the path on this plan," he declared.

In other financing news:

• Biodel Inc., of Danbury, Conn., has priced the public offering of 3.8 million shares of its common stock at $15.50 per share. The firm filed to sell the shares last month. Of the shares being sold in the offering, 3.26 million shares are being issued and sold by Biodel and 550,000 shares are being sold by certain stockholders of the company. Biodel expects to receive net proceeds from the offering of about $46.4 million, after deducting underwriting discounts and commissions, and estimated offering expenses. Morgan Stanley & Co. Inc. is acting as the sole bookrunner and J.P. Morgan Securities Inc. is acting as co-lead manager for the offering. Leerink Swann LLC and Natixis Bleichroeder Inc. are acting as co-managers.

• Javelin Pharmaceuticals Inc., of Cambridge, Mass., filed a $60 million shelf registration statement. In SEC filings, the firm said it plans to use the proceeds from the offering for general corporate purposes, including clinical research and development, sales and marketing efforts and working capital needs.

• Orexigen Therapeutics Inc., of San Diego, said that its underwriters partially exercised their overallotment option to purchase an additional 326,435 shares of its common stock in connection with its previously announced public offering that priced on Jan. 23. Including the overallotment shares purchased, the company sold 7.3 million shares at a public offering price of $11 per share, resulting in expected net proceeds to the company of about $75.8 million. Merrill Lynch & Co. acted as sole book-running manager and Leerink Swann LLC acted as co-lead manager for the offering. JMP Securities LLC, Lazard Capital Markets, Canaccord Adams Inc. and Natixis Bleichroeder Inc. acted as co-managers for the offering.