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Biotech / Medical : Elan Corporation, plc (ELN) -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (4297)	4/23/2003 10:31:47 AM
From: Icebrg	Read Replies (1) \| Respond to of 10345

ACUSPHERE DRAWS 11TH ROUND TO FUND COSTLY CLINICAL TRIALS By Tyson Freeman TheDeal.com April 22, 2003 -- Specialist drug developer Acusphere Inc., after pulling its initial public offering in 2000, then watching a joint venture agreement with a major pharmaceutical company collapse in late 2002, has raised an 11th round of venture financing to press on with costly Phase III clinical trials. The company said April 21 it raised $19 million in a Series J round of financing led by Thomas Weisel Partners of San Francisco. Also participating were BA Ventures of Foster City, Calif.; Burr, Egan, Deleage & Co./Alta Partners of San Francisco; Polaris Venture Partners of Seattle; BancBoston Ventures of Boston; HBM Bioventures AG of Zurich; Audax Group of New York; and Technology Funding of Boston. Acusphere expects to close an additional $1 million in financing in June to top off the round. "The funding will keep our forward momentum while we wait for the public markets to improve," said Acusphere chief financial officer John Thero. "The round really reflects the quality of our technology and the strength of our pipeline for those investors to continue to step up and finance us." Even for biotech startups, Acusphere has raised significant funds in its drive to commercialize its products. Since its inception in July 1993, the company has raised around $96 million in venture capital financing, $6.4 million through equipment capital leases and around $13 million through debt financing. In its most recent funding round, Watertown, Mass.-based Acusphere raised $15 million in June 2002 from Thomas Weisel and several previous investors. That funding round followed Acusphere's decision to withdraw in late 2001 its planned IPO offering, which was expected to yield up to $69 million. At the time of the IPO filing with the Securities and Exchange Commission, Thomas Weisel, also one of two lead underwriters for the deal, held a 15.3 percent stake in Acusphere, with 3.7 million shares. BA Ventures held 9.7 percent with about 2.3 million shares. Burr, Egan held an 11.9 percent stake with 2.9 million and Polaris Venture and Prism Ventures Partner of Westwood, Mass., held 6.5 percent and 5.7 percent respectively. Ailing Irish pharmaceutical company Elan International plc held a 9.8 percent stake at the time. Elan dealt Acusphere a blow in October when it terminated a joint venture agreement to restructure around Acusphere's neurology, pain and autoimmune disease products. This apparently led several investors not to return for Acusphere's J round, including Prism Venture Partner and CIT Group/Venture Capital Inc. of Livingston, N.J. Neither firm returned calls for comment. It's certainly been a rocky road for the startup's remaining investors, though at least one is still upbeat about the company's prospects. "The company is in fairly advanced stages with signing corporate partners for all of their major product initiatives," said Derek Lemke-von Ammon, a managing partner at Thomas Weisel. "We wanted to make sure that they had enough runway to see some of those potential partnerships to fruition. But we are encouraged about where the company is right now." Lemke-von Ammon added that parting ways with Elan helped provide the opportunity to find a stronger partner after being further along in trials. "The Elan situation ended up being a win for Acusphere," he said. "They retained their technology, the equity investment and lived to fight another day." As part of the termination agreement with Elan, Acusphere regained the rights to the inhalable drug products that the companies developed together and kept Elan's $7.5 million equity investment. Elan also forgave an $8 million loan to the company. In exchange, Elan takes away rights to royalties if the drugs ever reach the market. Acusphere is a specialty pharmaceutical company that develops new drugs and improves existing drugs using its proprietary porous microparticle nanotechnology as a delivery method. The company argues that using microparticles smaller than red blood cells allows more precise control over the solubility of its products. Proceeds will help fund Acusphere's continued advancement of an ultrasound contrast agent, AI-700, designed for use in detecting coronary artery disease in patients with heart disease. Of the company's three products under development, AI-700 commenced Phase III trials in February and is the furthest along in the drive to commercialization. The company is also working to develop more readily dissolving version of Bristol-Myers Squibb Co.'s cancer drug Taxol, which is in Phase I trials, and on an inhaled sustained release asthma drug that has completed its Phase I clinical trials. smalltimes.com