Like many other local life sciences businesses, Zogenix, a small, privately held pharmaceutical firm testing migraine painkillers, had grand plans for raising money through the public markets last year. But plans to carry out an $86 million initial public offering quickly sunk under the collapse of the financial markets and, in August 2008, Zogenix withdrew.
A year later, the industry is beginning to show new signs of life.
In recent weeks, weight loss drug maker Orexigen Therapeutics raised $71 million through a sale of 10 million shares of common stock, privately held startup Intellikine raised $51 million in a preferred stock sale to advance its cancer drugs, and aTyr Pharma, an early stage company focused on protein drugs, pulled in $12 million in venture funding.
Like many startups, Zogenix has yet to raise a profit, but today it counts $100 million in venture funding and loans, on top of an FDA approval for acute migraine treatment Sumavel DosePro.
“We’ve been like most companies in this market, struggling with raising capital,” said CEO Roger Hawley. “We just happen to be fortunate to have made enough progress … to get us through 2008.”
In July, after the company submitted additional toxicology data, the FDA granted Zogenix the go-ahead for Sumavel DosePro.
The self-administered, needle-free injector comes pre-filled with sumatriptan, an FDA-approved drug used for two decades in treating rapid onset migraines. Sumatriptan works by binding to serotonin receptors in the brain constricting blood vessels.
Patients snap off the device’s cap, flip a lever, place the penlike device against their belly or thigh and press a button, triggering pressure from a nitrogen gas chamber that pierces the skin and delivers the medicine.
Zogenix’s device is aimed at a portion of the 30 million Americans who suffer from migraines but fear needles or are dissatisfied with nasal sprays, tablets or other drug devices.
Hawley, who led the commercialization and sales efforts of migraine treatment Imitrex at pharmaceutical giant GlaxoSmithKline, said he noticed reluctance among headache specialists to prescribe patients an injectable treatment.
“Most of the concern about injections isn’t so much about pain as it is the intimidation,” he said. “That has, unfortunately, meant that a lot of physicians don’t offer it to their patients.”
At the same time, Hawley said clinical data demonstrated that large numbers of patients weren’t getting the kinds of relief they desired from a tablet.
Taking both into consideration, Hawley set out to acquire the rights to Intraject, a needle-free, single-use disposable injector that, when filled with sumatriptan, provides migraine relief in as quickly as 10 minutes. In August 2006, Zogenix paid $4 million upfront, plus milestone payments and the promise of future royalties to Hayward-based Aradigm, which owned the rights to Intraject but had shifted its focus toward inhalers.
