By Christopher Zinsli
Of DOW JONES VENTUREWIRE
The four largest investors in Pacira Pharmaceuticals Inc. have
committed up to $15 million to the drug developer, which is
attempting an initial public offering to bring its post-surgical
pain management treatment Exparel to market.
HBM BioVentures, MPM Capital, OrbiMed Advisors and Sanderling
Ventures purchased equal portions of the convertible-note offering,
which was disclosed Monday in the Parsippany, N.J.-based company's
latest IPO prospectus.
Half of the $15 million was funded on Dec. 29, 2010. The other
half will be funded upon the agreement of at least three-quarters
of the note holders. The notes will convert to common stock when
the company completes its IPO.
Pacira also issued the four venture firms warrants to purchase
up to 3.6 million shares of its common stock. The warrants, which
were split in two equal closings along with the notes, carry an
exercise price of $1.25 a share.
Pacira's board has increased the company's estimated share value
by more than threefold in the past three months, to $0.51 a share
as of Dec. 29, from $0.15 as of Sept. 30. The company attributed
the increase to various developments that position it to launch its
lead product, Exparel.
Between September and the end of last year, Pacira has filed a
New Drug Application for Exparel with the Food and Drug
Administration, registered for an IPO, entered into a $26.25
million credit facility with Hercules Technology Growth Capital
Inc. and completed the new sale of convertible notes.
Pacira expects a decision from the FDA regarding its NDA by July
28. Exparel has completed two pivotal Phase III trials with
positive results, following a pair of disappointing trials in 2009.
The company also is developing Exparel for nerve block and epidural
administration.
Pacira was acquired from British drug developer SkyePharma PLC
(SKYEY, SKP.LN) in 2007 by the four venture firms. The company
sells two other products, DepoCyt(e) and DepoDur, under licensing
arrangements.
Total revenue for the first nine months of last year was $12.4
million, up from $10.7 million over the same period of 2009. The
company has generated increasing revenue each year since at least
2007, but it remains unprofitable. Its accounting firm has
expressed doubt about the company's ability to continue as a going
concern.
Pacira has applied to list on the Nasdaq Global Market under the
symbol PCRX. Lead underwriters for the offering are Barclays
Capital and Piper Jaffray.
(This story was also published in Dow Jones VentureWire, a daily
publication that covers news about start-ups and venture
capital.)
-By Christopher Zinsli, Dow Jones VentureWire; 212-416-2034;
christopher.zinsli@dowjones.com