Washington Editor

Medicure Inc. said it expects to raise $40 million under two separate agreements for ongoing clinical development of a new cardioprotective agent and continued commercialization efforts for an approved coronary drug.

The Winnipeg, Manitoba-based firm has signed a term sheet to monetize a percentage of its current and potential future commercial revenues with Manchester Securities Corp., an affiliate of U.K.-based Elliott Associates LP, for a $25 million up-front cash payment.

Under the deal, Elliott will receive an escalating minimum annual return for 12 years starting at $2.5 million based on revenue from Aggrastat (tirofiban hydrochloride), a drug used in combination with heparin for the treatment of acute coronary syndrome, including patients who are to be managed medically and those undergoing percutaneous transluminal coronary angioplasty or atherectomy.

Merck & Co. Inc., of Whitehouse Station, N.J., owns the marketing rights for Aggrastat outside the U.S.

As part of the agreement, Elliott has the option to convert its rights based on Aggrastat to another of Medicure's products within six months, after that product, known as MC-1, has entered the U.S. market.

Medicure Chief Financial Officer Derek G. Reimer told BioWorld Today that the firm has completed four Phase II clinical trials of MC-1 with positive results as a cardioprotective agent in patients undergoing coronary artery bypass graft (CABG) surgery and angioplasty.

The company expects to conclude enrollment for a Phase III study in November examining the drug in 3,000 patients undergoing CABG surgery.

Following positive results, Medicure expects to submit a new drug application to the FDA for MC-1 in mid-2008, Reimer said, adding that the firm plans to seek priority-review status, a designation in which a product's review time is expedited and can result in an approval within six months of an NDA submission.

The drug already has achieved FDA fast-track designation.

Reimer said the company anticipates receiving an approval decision for MC-1 by late 2008 or early 2009.

The exact percentage of Aggrastat or MC-1 revenue that Elliott will receive is tiered and declines as certain revenue levels are achieved, Medicure stated.

Upon conversion to MC-1, Elliott is entitled to a blended return of approximately 7 percent on the first $75 million in MC-1 revenues and 3 percent thereafter.

The Elliott agreement is subject to a number of typical closing conditions and the execution of a definitive agreement. The transaction is expected to be completed by Sept. 7.

Leerink Swann & Co. served as lead advisor on the transaction.

In a separate transaction, Medicure has entered into a securities purchase agreement with investors to raise $15 million. Under terms of that agreement, the Canadian firm intends to issue about 13.04 million common shares at a price of $1.15, together with warrants, to purchase approximately 3.9 million additional common shares.

The warrants have a five-year term and an exercise price of $1.50. The agreement is subject to standard closing conditions including regulatory approval and is expected to close in September.

In addition to Leerink Swann, A.G. Edwards & Sons Inc., Merriman Curhan Ford & Co. and RBC Capital Markets Inc. served as financial advisors.

Medicure plans to disclose further details about the deals in a quarterly conference call later this week, Reimer said.

In other financing news:

• Acura Pharmaceuticals Inc., of Palatine, Ill., has entered into a securities purchase agreement with Vivo Ventures Fund VI LP, Vivo Ventures Fund VI Affiliates Fund LP, GCE Holdings LLC and certain individual investors worth $14.5 million. Acura plans to use a portion of the net proceeds to fund Study 105, a pivotal Phase III trial for OxyADF (oxycodone HCl and niacin) tablets for the treatment of acute, moderate-to-severe postoperative pain following bunionectomy surgery in adult patients.

• Encysive Pharmaceuticals Inc., of Houston, has agreed to sell 7.7 million shares common stock in a registered offering for $15 million before fees and expenses. The firm also will issue five-year warrants to purchase an aggregate of about 7.7 million additional shares of its common stock at an exercise price of $1.95 per share. The closing of the transaction is expected to take place on or before Aug. 24. Encysive intends to use the net proceeds of the offering for working capital and general corporate purposes, including the firm's activities related to the commercialization of its oral endothelin receptor antagonist, Thelin (sitaxsentan sodium) in Europe, Canada and Australia.