NeurogesX Inc. registered to raise up to $69 million in an initial public offering to fund late-stage development of its dermal patch products for pain.
The near-term prospects of the company are riding on its lead product, Transacin (NGX-4010), a dermal patch containing a high concentration of synthetic capsaicin. NGX-4010 has been evaluated in three Phase III trials, two successful and one unsuccessful. The San Carlos, Calif., company expects to file for approval in Europe this year based on existing data, and is conducting two pivotal trials to support planned new drug application filings in the U.S. in 2008.
The lead indications are the management of pain associated with postherpetic neuralgia, or PHN, and management of pain from HIV-associated distal sensory polyneuropathy, or HIV-DSP. One of two Phase III trials in PHN met its primary endpoint, as did a Phase III trial in HIV-DSP.
NeurogesX said it intends to file for approval in Europe in mid-2007 based on the successful Phase III trials, initially seeking labeling in the broader indication of peripheral neuropathic pain. It plans to find a marketing partner in Europe, while establishing its own sales force in the U.S.
The company, founded in 2000, has raised about $86 million to date in three financing rounds, including a two-tranche Series C round. Its net loss through Sept. 30 was about $80.4 million. It also secured a $10 million loan in 2006. As of Sept. 30, it had about $21.7 million in cash. NeurogesX expects proceeds of the offering would fund operations for about 12 months.
By that time there should be a much clearer picture at NeurogesX. Data are expected from the ongoing pivotal trial in PHN in the second half of 2007 and from the pivotal trial in HIV-DSP in 2008.
NeurogesX said it intends to use about $40 million from the offering to fund research and development activities, including $25 million for the completion of the clinical and regulatory program for NGX-4010 in PHN and HIV-DSP and another $10 million for clinical development of NGX-4010 in the larger indication of painful diabetic neuropathy. Another $5 million would be earmarked for development of NGX-1998, a nonpatch liquid formulation of NGX-4010 that is in Phase I trials; and for work on its preclinical opioid analgesic prodrug for use in the management of more severe pain conditions.
NGX-4010 is designed to provide a pure high-concentration form of synthetic capsaicin, known as trans-capsaicin, directly to the site of pain through a rapid-delivery skin-patch application system. The company said studies have shown that a single topical application may provide three months of pain relief with minimal side effects or drug-drug interactions.
A Phase III trial in 402 post-herpetic neuralgia patients met its primary endpoint of reducing pain versus baseline for two to eight weeks, versus a low-concentration capsaicin control patch. A Phase III study in painful HIV-associated distal sensory polyneuropathy enrolled 307 patients with moderate to severe pain in both feet. It also demonstrated a statistically significant decrease in average pain versus the low-dose control patch, in that case over weeks two to 12.
The largest NeurogesX shareholder is ARCH Venture Partners, of Chicago, which owns 24.7 percent of the company. Other significant shareholders are Alta Partners, also of Chicago, with 18.6 percent; Walden International, of San Francisco, with 14.3 percent; Montreux Equity Partners, of Menlo Park, Calif., with 10.2 percent; and Global Lifescience Venture, of Munich, Germany, with 6.5 percent.
Morgan Stanley & Co. Inc. is lead manager for the offering. Co-managers are Pacific Growth Equities LLC, Lazard Capital Markets LLC and Susquehanna Financial Group LLLP. The number of shares and the price range for the proposed offering were not disclosed. NeurogesX's proposed ticker symbol on Nasdaq is "NGSX."
NeurogesX said in its prospectus that its lead product would compete with the marketed products Lidoderm, a 5 percent lidocaine topical patch for the treatment of PHN marketed by Endo Pharmaceuticals Inc., of Chadds Ford, Pa., and Neurontin and Lyrica, oral anticonvulsants marketed by Pfizer Inc. , of New York, for use in the treatment of PHN. In addition, the FDA has approved the generic agent gabapentin for PHN, and it is widely used for neuropathic pain. Pfizer also received FDA approval of Lyrica for the treatment of painful diabetic neuropathy (PDN) and epilepsy indications. And the FDA has approved Cymbalta from Eli Lilly and Co. , of Indianapolis, for use in the treatment of PDN and depression.