(The boss was very chatty - I bet the reporter was wearing a mini and a brave smile)
Neurocrine Snares $75M CEFF to Hunt for Products to License
By Catherine Hollingsworth Staff Writer Neurocrine Biosciences Inc. has secured a commitment from Kingsbridge Capital Ltd. to purchase shares in the company through a warrant-free equity financing that would provide up to $75 million over three years. San Diego-based Neurocrine already is on solid footing, with $74 million in cash and investments at the end of the second quarter. That's plenty of money, noted Jason Napodano, an analyst with Zacks Investment Research, adding that the current cash could carry the company into 2010. The lack of any warrants means that Neurocrine's shares won't be further diluted and Kingsbridge won't gain additional control of the company, Napodano noted. But Neurocrine does not plan on touching the funds just yet, if at all. "If we do access - I'm not saying that we will - it's a good thing to have," Neurocrine CEO Kevin Gorman told BioWorld Today. The company does not plan to access the committed equity financing facility (CEFF) to fund studies of its drug candidate for endometriosis pain, elagolix. Instead, Neurocrine plans to fund the remainder of the program through a partnership. The company currently is in advanced discussions with multiple parties, Gorman said. If Neurocrine does decide to access the CEFF, it could be used to in-license other products after the elagolix partnership is secured, he said. Neurocrine still needs to complete a Phase IIb trial for elagolix. Two of three Phase IIb trials have been completed, and the third in Eastern Europe is still under way, with top-line data from the initial three month treatment period expected after Thanksgiving, Gorman said. Six-month data are expected in first quarter 2010, he said. After discussion with the FDA in a type C meeting, the company also is conducting a small Phase II study to determine sample size estimation. The study is needed because the endometriosis pain endpoint is slightly different than the one originally anticipated, Gorman explained. An end-of-Phase II meeting with the FDA set for 2010 remains on track. In that meeting, the FDA and Neurocrine will seek agreement on the design of the pivotal Phase III program for elagolix in endometriosis. The company expects elagolix Phase III trials to start in early 2010. Timothy Coughlin, vice president and chief financial officer of Neurocrine, said in a statement, "The attractive terms and complete control of this vehicle were the key features of our decision to add this program to our capital structure. Our CEFF also represents a departure from the typical structure of Kingsbridge CEFF agreements, as it has no warrant coverage." Under the terms of the CEFF, the funds that can be raised over the three-year term will depend on the then-current price for Neurocrine's stock, and the number of shares actually sold may not exceed an aggregate of about 8 million. Neurocrine is not obligated to use any of the $75 million available under the CEFF, and there are no minimum commitments or minimum use penalties. Neurocrine may access capital under the CEFF in tranches up to a maximum of 2.75 percent of its market capitalization at the time of the drawdown of each tranche, subject to certain conditions, including a minimum share price threshold and the requirement that no individual tranche exceed $15 million. Kingsbridge may purchase shares of common stock pursuant to the CEFF at discounts ranging from 5 percent to 10 percent, depending on the average market price of Neurocrine's common stock during the applicable pricing period. Shares in Neurocrine (NASDAQ:NBIX) rose 9 cents, closing at $3.22.