CorMedix Lines Up for IPO: Biotech's Latest Deals

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Includes: GTXI, LH, PFE, PRGO
by: The Burrill Report

by MARIE DAGHLIAN

New Jersey biotech CorMedix priced its initial public offering during an otherwise quiet week for life sciences financings and deals. Its stock will trade on the NYSE Amex under the symbol "CRMD.U." The company is focused on developing and commercializing therapeutics for the treatment of cardiac and renal dysfunction. CorMedix is the fourth biotech company to go public in 2010 in a market that has been lukewarm to high-risk biotech companies. Ironwood Pharmaceuticals, Anthera, and Aveo Pharmaceuticals all priced below their expected range.
CorMedix is offering 1.9 million units at $6.50 per unit. Each unit consists of two shares of CorMedix common stock and a warrant to purchase one share of common stock at a price of $3.44. The company has also granted underwriters a 45-day option to purchase up nearly 290,000 additional units to cover over-allotments, if any. Maxim Group is the book-running manager for the offering. CorMedix is the fourth biotech company to go public in 2010 in a market that has been lukewarm to high-risk biotech companies. Ironwood Pharmaceuticals (NASDAQ:IRWD), Anthera (NASDAQ:ANTH), and Aveo Pharmaceuticals (NASDAQ:AVEO) all priced below their expected range.
South San Francisco-based diagnostics company Nodality closed a $15.5 million venture financing round led by Pfizer Ventures, Pfizer's (NYSE:PFE) venture arm, and Laboratory Corporation of America Holdings (NYSE:LH). Previous investors Kleiner Perkins Caulfield & Byers, TPG Biotechnology, and Maverick Capital also participated in the funding. The money will be used to support Nodality's launch of its first test in acute myelogenous leukemia, as well as to advance ongoing and new research and development programs in other hematologic malignancies, autoimmune diseases, and solid tumors [see story].
Nodality develops and commercializes the next generation of personal diagnostic tests by characterizing cell signaling pathways in defined cellular sub-populations of malignant and normal cells. The company applies its proprietary technology to develop highly predictive biological characterization tests to improve patient management in cancer and autoimmune diseases.
San Diego-based Genomatica, a developer of chemical processes based on bio-manufacturing, raised $15 million in a series C funding round led by TPG Biotech, with participation by previous investors Mohr Davidow Ventures, Alloy Ventures, and Draper Fisher Jurvetson. Genomatica's initial target market is 1,4 butanediol (BDO), a chemical used for creating polymers, solvents, and other chemicals for the clothing, car, and electronics market.
Perrigo (NASDAQ:PRGO), a drugmaker specializing in over-the-counter and branded generics, acquired PBM Holdings, the world's largest manufacturer and marketer of infant formulas for the store brand market, for $808 million in an all cash transaction. The acquisition extends Perrigo's global store brand reach and portfolio in an important adjacent category. PBM's products are sold in the United States, Canada, Mexico and China.
Finally, struggling GTx (NASDAQ:GTXI) restructured and expanded its partnership with French pharmaceutical company Ipsen for the development and commercialization of toremifene 80 mg for the reduction of fractures in men with advanced prostate cancer on androgen deprivation therapy and toremifene 20 mg for the prevention of prostate cancer in high risk patients with high-grade prostatic intraepithelial neoplasia lesions. Running low on cash and in need of initiating another late-stage trial in order to get regulatory approval for its drug, the company seems to have given up a lot.
Under the terms of their amended collaboration agreement, Ipsen will pay GTx up to $58 million in milestone payments upon the initiation, enrollment and progression of the second toremifene 80 mg phase 3 clinical trial. In return, GTx has granted Ipsen: either the right to co-promote toremifene 80 mg in the United States, or the right to a double digit royalty stream on U.S. net sales. The revised agreement also provides Ipsen with an expanded licensed territory for marketing toremifene products beyond Europe, including Australia and certain countries in North Africa, the Middle East, and Asia (excluding Japan). Ipsen is also relieved from previous contractual obligations, which include paying GTx potential remaining milestones related to the European approval of toremifene 80 mg. The new agreement sets royalties on Ipsen’s net sales of toremifene 80 mg at a fixed low-teens rate compared to a variable rate previously and grants Ipsen a first right of negotiation under certain conditions for rights to GTx-758, currently in mid-stage clinical trial for the first-line treatment of men with advanced prostate cancer, in Ipsen’s licensed toremifene territories.
Toremifene is a selective estrogen receptor modulator, or SERM. GTx submitted a New Drug Application to the United States Food and Drug Administration in 2008, based upon the successful results of a first phase 3 clinical trial for toremifene 80 mg for the reduction of fractures in men with prostate cancer on ADT. The FDA declined to approve the drug and told the company it would need to conduct a second late-stage clinical trial.