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May 13, 2011

Biodel to Obtain $30M from Registered Direct Offering

  • Biodel, which is developing antidiabetics, expects to raise $30 million through a registered direct offering. The firm will sell approximately 12.2 million shares of its common stock, 1.7 million shares of its Series A convertible preferred stock, and warrants to purchase 9.0 million shares of its common stock.

    These securities are being sold as units, with each unit consisting of one share of common stock and a warrant to purchase 0.65 of a share of common stock. Certain investors are also purchasing units that consist of one share of Series A convertible preferred stock and a warrant to purchase 0.65 of a share of common stock in addition to the units comprising common stock and a warrant to purchase 0.65 of a share of common stock. The investors agreed to purchase units for $2.16 per unit. The per share exercise price of the warrants is $2.48.   

    The Series A convertible preferred stock is nonvoting. Each share of Series A convertible preferred stock is convertible into one share of Biodel's common stock, provided that conversion will be prohibited if, as a result, the holder and its affiliates would own more than 9.98% of the total number of Biodel shares of common stock outstanding following conversion.

    Biodel develops antidiabetics by applying its formulation technologies to existing drugs to improve their therapeutic profiles. Its lead candidate is Linjeta (formerly known has VIAject), which was submitted to the FDA for marketing approval as a treatment for type 1 and type 2 diabetes. It is a more-rapid-acting injectable regular human insulin developed for meal-time use to improve glycemic control.

    Next in line is VIAtab, an oral sublingual insulin tablet that dissolves in minutes when placed under the tongue. It is in Phase I trials and is being developed for use as an insulin supplement for early-stage type 2 diabetics. It reportedly mimicks first-phase insulin-release signaling, reducing the production of glucose by the liver and maintaining normal glucose levels.

    BIOD-Adjustable Basal is also in Phase I studies. It is a 24-hour basal insulin that is being developed in slow-, medium-, and fast-acting forms to allow customized 24-hour dosing for each patient and reduce the risks of hypoglycemia and hyperglycemia.

    In preclinical development is BIOD-Smart Basal and BIOD-Stable Glucagon. BIOD-Smart Basal is an NCE that is designed to release insulin proportionally to subcutaneous glucose concentration. As a result, it automatically adjusts to unanticipated changes in patients’ insulin needs, such as those due to exercise or fever, to maintain a more normal glycemic range.

    BIOD-Stable Glucagon is being developed as a premixed “rescue” drug that can be delivered in an auto-injector device to treat insulin overdoses. Glucagon is a highly unstable compound that helps regulate blood glucose levels by signaling the liver to convert glycogen into glucose. It is currently sold as an acidic dry powder that must be reconstituted into a liquid by a caregiver for injection into the patient. Biodel is working with physicians to develop a more stable form of glucagon for use in bi-hormonal pumps, which could replace current insulin pumps and continuous glucose-monitoring devices.


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