Encysive Pharmaceuticals Inc. raised $60 million through the sale of nonconvertible notes that are secured by royalties it gets on sales of Argatroban, money that will be used to support sales and development of Thelin and other programs.

The 12 percent notes mature in September 2014. Quarterly interest and principal payments will come solely from royalties paid to Encysive by GlaxoSmithKline plc, of London, which sells Argatroban for treating heparin-induced thrombocytopenia.

Argatroban, a small-molecule thrombin inhibitor, was approved in 2000, when Encysive was known as Texas Biotechnology Corp. Encysive earned $12.9 million in Argatroban royalties in 2005 and $12.6 million through the first three quarters of 2006, a company spokesman said.

Rights to the royalties and any other Argatroban-related payments were transferred to a wholly owned Encysive subsidiary. Payments are not guaranteed by Encysive. Royalties for any quarter that exceed interest due would be applied to principal. Encysive retained an option to redeem the notes.

The company spokesman told BioWorld Today that Houston-based Encysive chose this route for raising money because of its nondilutive nature.

Encysive had about $49.9 million in cash at the end of the third quarter, with a net loss of $25.5 million for that period (and $83.5 million for first three quarters of the year). It had 58.5 million shares outstanding.

In October, Encysive entered a deal that would allow it to sell, at its discretion, up to $75 million in stock over 18 months to Azimuth Opportunity Ltd. The company made two drawdowns from that deal, in November and December, totaling $18 million in gross proceeds. A total of 3.086 million shares were sold at $5.82 and $5.85 per share, a slight discount to average prices at the time.

The focus at Encysive is on Thelin (sitaxsentan), an oral, selective, once-daily endothelin A receptor antagonist being developed for pulmonary arterial hypertension. The first new application filing for that drug, in May 2005, was met with an approvable letter from the FDA, as was the second. The FDA on Dec. 28 accepted for filing the company's response to the NDA filed in July 2006, and set a PDUFA action date of June 15.

Encysive, however, has had some regulatory success with Thelin while trying to get it to market in the U.S. In August, it was granted approval in the European Union for improving exercise capacity in PAH patients, and Thelin was launched in the UK in November and Germany in December.

Encysive plans to have 35 sales representatives selling Thelin in Europe, and is targeting product launches this year in Spain, France, Italy and the Netherlands, the spokesman said.

Marketing applications for Thelin also are pending in Australia and Canada. The Australian Drug Evaluation Committee of the Therapeutic Goods Administration issued an opinion in December recommending approval of the drug there. The final decision will come from the TGA.

In development, Encysive is conducting the open-label STRIDE-3 trial evaluating Thelin in a broader PAH patient population. In December, Encysive received FDA clearance to resume clinical studies of TBC3711, a next-generation, selective endothelin A receptor antagonist believed to be more potent than Thelin. Work had been put on hold due to abnormal data seen in a rat study.

Separately, Encysive partner Revotar Biopharmaceuticals AG, of Brandenburg, Germany, is conducting clinical studies of bimosiamose, a synthetic, small-molecule pan-selectin antagonist, for inflammatory disorders. And partner Schering-Plough Corp. is developing orally available VLA-4 antagonist compounds for asthma and other indications.

Encysive's stock (NASDAQ:ENCY) gained 14 cents Wednesday to close at $3.56.

In other financing news:

• Gentium SpA, of Villa Guardia, Italy, entered definitive agreements for a $47.5 million private placement of 2.354 million American depository shares at $20.17 per ADS. The stock is being purchased by U.S. and Italian institutional investors. ThinkEquity Partners LLC is exclusive placement agent. Proceeds will be used to fund development of Gentium's lead product candidate, Defibrotide, which is in Phase III trials for treating veno-occlusive disease. Funds also will be used to acquire certain additional rights to Defibrotide from Crinos SpA, of Como, Italy, and for general corporate purposes.

• Acorda Therapeutics Inc., of Hawthorne, N.Y., received a second $5 million payment as part of its agreement with an affiliate of Paul Capital Healthcare to fund the expansion of its Zanaflex capsules sales force from 32 to 65 representatives. The second payment was made upon the achievement of sales goals for 2006. Zanaflex (tizanidine hydrochloride) is a short-acting drug for the management of spasticity.

• Icagen Inc., of Research Triangle Park, N.C., closed a previously announced $22 million private placement of about 15.4 million shares of common stock, together with warrants to purchase about 5.4 million additional shares at $1.45 per share. Units were sold at $1.42 each. (See BioWorld Today, Jan. 30, 2007.)

• Medivir AB, of Huddinge, Sweden, said it grossed about SEK224.5 million (US$32 million) through a fully subscribed rights issue. Carnegie Investment Bank was financial adviser for the deal. Shares are expected to begin trading Feb. 28 on the Stockholm Stock Exchange.