Backing comes at an opportune time, as the company has faced a couple of setbacks.

XenoPort obtained commitments from institutional investors to purchase approximately $40 million of its common stock and warrants in a registered direct offering. The net proceeds are expected to be approximately $39.7 million after offering expenses.

In the last couple of months, XenoPort has had two major setbacks, sending its stock down about 37%. Earlier this month, Xenoport’s acid reflux drug failed to meet its primary endpoints in a mid-stage trial.

In November, GlaxoSmithKline (GSK), the U.S. partner for Xenoport’s lead candidate, an RLS drug, decided to withdraw the NDA. GSK now says that it will likely resubmit the NDA in January 2009. If the therapy does not win approval, XenoPort stands to lose $23 million in milestone fees.

Hence, today’s financing comes at an important time for the company, which has multiple clinical programs covering pain, GERD, spasticity, and Parkinson’s. XenoPort will sell 1,889,467 newly issued shares of its common stock and warrants to purchase 283,420 shares of common stock at a purchase price of $21.17 per unit.

Each unit consists of one share of common stock and one warrant to purchase 0.15 of a share of common stock. The warrants are immediately exercisable at $25.40 per share and will expire five years from the date of issuance.

The financing was led by funds affiliated with Maverick Capital with participation by funds affiliated with Venrock. This transaction is expected to close on or prior to January 5, 2009.


Previous articleNovartis Licenses AlphaVax’ CMV Vaccine Program for $20M
Next articleVeridex’ CellSearch Misses One Breast Cancer Subtype