Deal allows pharma company to sell common stock British Virgin Islands-based fund.NPS Pharmaceuticals Inc., of Bedminster, today said it has secured a committed equity financing facility worth $40 million.
Under the terms of the deal, NPS may sell up to $40 million of its common stock over 18 months to Azimuth Opportunity Ltd., a fund that lists its offices in Tortola, British Virgin Islands. NPS said it Âis not obligatedÂ to use the money. It has not paid any commitment fees to Azimuth, and is free to pursue other financing transactions, NPS said in a statement.
“It is just prudent management on our part to make sure we always have at least one yearÂs worth of cash on hand,” said Luke Beshar, NPS Pharma’s chief financial officer. Before the Azimuth deal, NPS had enough cash on hand to last until the end of 2010; its annual cash burn is between $55 million and $60 million, he said. The Azimuth financing represents NPS Pharma’s requirements for two-thirds of a year, he added.
Whenever it decides to tap the Azimuth funding, NPS said, it will issue shares Âat a small discountÂ to the average share price in the preceding days. Any shares sold under this facility will be sold pursuant to a shelf registration statement declared effective by the Securities and Exchange Commission on June 5.
NPS said it is currently developing new treatment options for patients with rare gastrointestinal and endocrine disorders. They include two Phase 3 studies Â for Teduglutide to treat gastrointestinal disorders, and another drug as a hormone replacement therapy. In addition to its proprietary programs, it has a royalty-based portfolio of products and product candidates, including agreements with Amgen, GlaxoSmithKline, Kyowa Kirin, Nycomed and Ortho-McNeil-Janssen Pharmaceuticals.
NPS had $102.3 million in revenue last year, but incurred a loss of $31.7 million. Its revenue was only $16.3 million in this yearÂs first quarter, sharply lower than the $24 million to $27 million range of the previous three quarters.
Two years ago, the company raised $275 million with a combination of $50 million in convertible bonds and licensing and royalty agreements. That included the sale of the rights for its gastrointestinal drug Gattex in markets outside North America to Nycomed, of France.
E-mail Shankar P. at [email protected]