These net proceeds will come from a private placement financing of up to $41.5 million.

Achillion Pharmaceuticals entered into definitive agreements for $31.1 million and up to an additional $10.4 million in a private placement financing. The company expects net proceeds on August 11 of approximately $29.5 million after the deduction of offering expenses.

The investment in Achillion includes the sale and issuance of 10,714,655 units, with each unit consisting of one share of the company’s common stock and a warrant to purchase 0.25 shares of common stock at $2.9049 per unit. The investors may have the option to purchase an additional 3,679,078 units between February 2009 and August 2009.

The warrants, which represent the right to acquire an aggregate of 2,678,664 shares of common stock, have a seven-year term from the date of issuance and will be exercisable at a price of $3.53 per share.

The group of institutional investors was led by ProQuest Investments and joined by Clarus Ventures and Investor Growth Capital. Funding will be used to advance Achillion’s pipeline of antiviral candidates for hepatitis C, including lead compound, ACH-1625, from Achillion’s internal HCV protease program, and ACH-1095, an NS4A antagonist from the firm’s partnership with Gilead Sciences.

“This financing will provide the resources to advance our two HCV candidates, each with distinct mechanisms of action that operate synergistically, to proof-of-concept, as we plan to initiate clinical studies for both ACH-1095, now also known as GS-9525, and for ACH-1625 during 2009,” says Michael Kishbauch, president and CEO.

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