DARA BioSciences increased the size of its registered direct offering from $4 million, which was reported on Tuesday, to up to $4.8 million. The 4,800-unit offering is priced at $1,000 each, with a unit comprising shares of Series A convertible preferred stock and warrants to purchase shares of common stock. The proceeds will be used for the ongoing development of its lead candidates and for working capital and general corporate purposes.
DARA BioSciences is a Raleigh, NC-based company that acquires promising therapeutic candidates and develops them through proof-of-concept in humans for subsequent sale or out-licensing to larger pharmaceutical companies. The firm has 82 granted patents and 56 pending applications.
DARA's lead candidate, KRN5500, successfully completed a Phase II trial treating neuropathic pain in patients with cancer. A second Phase II study is planned during the first half of 2011. In addition, DARA has entered into a clinical trial agreement with the NCI to study the prevention and treatment of neuropathic pain in cancer patients.
The firm's pipeline also includes DB959, an oral, highly selective, nonthiazolidinedione (TZD), dual PPAR (peroxisome proliferator activated receptor) delta/gamma agonist in development for type 2 diabetes. A Phase I study has been completed and a second Phase I trial is planned to commence in the first quarter 2011.
In addition, DARA owns CPT-1 inhibitors intended for topical application for patients with psoriasis, a library of DDPIV inhibitors, and a library of approximately 1,800 PPAR agonists of various molecular modalities.
PPAR receptors are found throughout the human body. Recent publications report that PPAR agonists may be useful in the treatment of Alzheimer disease, cystic fibrosis, liver disease, and a variety of autoimmune diseases, according to DARA.
Each share of Series A convertible preferred stock is convertible into 400 shares of the firm’s common stock. The offering also includes a Class A Warrant to purchase 200 shares of common stock and a Class B Warrant to purchase 200 shares of common stock.
Subject to certain ownership limitations, the Series A preferred stock is convertible at any time at the option of the holder into shares of common stock at a conversion price of $2.50 per share. Class A and B Warrants are exercisable immediately after the date of issuance and expire five years and one year later, respectively. Both classes of warrants entitle the holder to purchase shares of common stock for an exercise price equal to $2.50.