Washington Editor

CV Therapeutics Inc. entered a deal to potentially raise up to $200 million through common stock sales to Azimuth Opportunity Ltd., which could become the biopharmaceutical firm's largest shareholder as a result.

"It's a flexible financing vehicle," explained John Bluth, CVT's senior director of corporate communications, "that gives us the opportunity to be flexible over the course of a three-year commitment."

Over that period, CVT is permitted to occasionally sell registered stock at a small discount to market (up to $200 million), or a number of shares that equal one less than 20 percent of CVT's issued and outstanding shares as of April 18, whichever comes first. The discount would range between 3.8 percent and 5.8 percent, based on market capitalization.

All future sales are at CVT's sole discretion. "We can choose to or not choose to," Bluth told BioWorld Today, "so it's up to us."

The cardiovascular-focused business, which is based in Palo Alto, Calif., had about $460.2 million in cash, cash equivalents and marketable securities as of Dec. 31. On April 12, there were about 45 million common shares outstanding and no preferred stock.

CVT said it would use any proceeds for general corporate purposes, including funding for the commercialization of its approved products, drug development and related clinical trials, product manufacturing, research and development, preparation and filing of new drug applications and other filings for marketing approval, and for increasing working capital, reducing debt, funding potential acquisitions of or investments in complementary businesses, products or technologies and capital expenditures.

Among the company's approved products are the recently launched chronic angina drug Ranexa (ranolazine extended-release tablets), as well as Aceon (perindopril erbumine), an ACE inhibitor for reducing the risk of cardiovascular mortality or nonfatal myocardial infarction in patients with stable coronary artery disease and treating essential hypertension.

An internal sales force, built through a co-promotion agreement on Aceon, is providing the marketing muscle behind Ranexa, the first new angina drug approved in the U.S. in more than two decades. (See BioWorld Today, Jan. 31, 2006.)

To broaden Ranexa's label, CVT is conducting a study under a special protocol assessment agreement with the FDA to potentially lead to its approval as first-line chronic angina therapy. Data are due in the fourth quarter or early next year.

CVT's lead investigational product is regadenoson, which is being developed for potential use as a pharmacologic stress agent in myocardial perfusion imaging studies.

Data from a second Phase III trial on regadenoson are due later this year; an initial Phase III study met its primary endpoint.

Bluth called the agreement "consistent with the kinds of financing vehicles we've looked at in the past."

Should Azimuth's purchase approach a 20 percent holding in CVT, it would control far more shares than any current investor, based on recent filings made with the SEC. Its top institutional holder, Fidelity Management & Research Corp. in Boston, controls a stake of about 11 percent. Other large institutional holders are Wellington Management Co. LLP, another Boston firm with about 8 percent; Baltimore's Legg Mason Capital Management Inc., which controls about 7 percent; Goldman, Sachs & Co. in New York, with just less than 6 percent; Mazama Capital Management Inc. in Portland, Ore., with about 5 percent; and Delaware Management Holdings in Philadelphia, with just less than 5 percent.

Acqua Capital is an adviser to Azimuth, which agreed that its sales of CVT's common stock on any trading day would not represent more than 20 percent of that day's total volume.

On Wednesday, CVT's stock (NASDAQ:CVTX) gained 33 cents to close at $22.88.