Allosteric modulation company Addex Pharmaceuticals obtained CHF6 million (almost $6 million) through the issuance of 593,567 new registered shares and CHF14 million through the issuance of zero coupon six-month mandatory convertible notes (MCN) to Biotechnology Value Fund (BVF) and its affiliates.
"This fundraising affords us the means to advance the high-value programs in our pipeline including products for osteoarthritis pain, endometriosis, Alzheimer disease, diabetes, and inflammatory diseases, in addition to our lead product, ADX48621, for Parkinson dyskinesia," says Vincent Mutel, CEO of Addex.
Addex is focused on diseases of the central nervous system, metabolic disorders, and inflammation. Subject to regulatory approvals, the firm expects to initiate Phase II trials in the near future for two products: ADX48621 and ADX71149. ADX48621 is an mGluR5 negative allosteric modulator (NAM), which will be tested in Parkinson disease levodopa-induced dyskinesia (PD-LID) and separately in non-Parkinson dystonia patients. Last week Addex received $900,000 from The Michael J. Fox Foundation for Parkinson's Research to support the PD-LID trial. The company expects to start the study in the fourth quarter of this year.
ADX71149 is an mGluR2 positive allosteric modulator (PAM), which has potential for treatment of schizophrenia, anxiety, and other indications, Addex notes. The compound is licensed to Ortho-McNeil-Janssen Pharmaceuticals.
Two more products may enter Phase I testing in 2011, Addex says. ADX71943, a GABA-B receptor PAM, has potential for chronic pain, and ADX68692, a follicle-stimulating hormone receptor NAM, has potential for endometriosis and benign prostatic hyperplasia. Discovery-stage programs include mGluR2 NAM, GLP1R PAM, IL1R1 NAM, and TNFR1 NAM.
In addition, Merck & Co. has licensed rights to two preclinical programs: mGluR4 PAM for Parkinson disease and mGluR5 PAM for schizophrenia. Merck extended its arrangement in December 2009 by a year, promising Addex $1.8 million in research backing over the extension period. The deal was initiated in December 2007, and Addex received $3 million up front. It has earned $750,000 in milestones out of a potential $166.5 million that it could receive if all goals are met for three products.
"The capital from BVF and the recent award from The Michael J. Fox Foundation for Parkinson's Research significantly strengthen our financial position, providing us with the means to deliver a number of significant value inflection points through early 2013, while simultaneously enhancing our proprietary platform," says Tim Dyer, CFO of Addex.
The transaction with BVF was priced at a 12% premium to the volume weighted average price during the five trading days prior to the announcement, corresponding to a price of CHF10.18 per share. The terms of the zero coupon six-month MCN comprise a fixed conversion price of CHF10.18 and will convert into 1,371,069 new shares issued from the company's conditional capital on March 14, 2011.