Cadence Pharmaceuticals Inc., a San Diego-based biopharmaceutical company focused on uses in the hospital setting, said it plans to sell $75 million of stock to raise money to expand the reach of its only product — an injectable acetaminophen drug called Ofirmev — and for other corporate purposes.
On Nov. 15, the company said it has priced 19 million shares at $3.75 each in an offering expected to close Nov. 18, and that it has given the underwriters a 30-day option to buy up to an additional 2.8 million shares to fulfill any excess demand.
Cadence expects to see net proceeds of about $67.4 million.
In March 2006, Cadence in-licensed the exclusive U.S. and Canadian rights to Ofirmev from Bristol-Myers Squibb Co., which currently markets the product in Europe and several other markets under the brand name Perfalgan.
After a roller-coaster regulatory process, the drug gained Food and Drug Administration approval in November 2010, and Cadence kicked off U.S. sales in January 2011.
A First
Ofirmev is the first and only intravenous formulation of acetaminophen to be approved in the U.S., giving doctors a way to reduce patients’ pain and fevers in instances when oral medicines aren’t an option.
Cadence said that as of Oct. 31, Ofirmev had been approved on over 1,400 hospital formularies, representing more than 60 percent of its targeted domestic IV analgesic market. “Our optimism is supported by strong growth in measures indicating customer demand, such as the number of new and repeat customers, and increases in the frequency and size of orders, over previous quarters,” said Ted Schroeder, president and CEO of Cadence, in a Nov. 3 earnings statement.
For the third quarter of 2011, net sales of Ofirmev, were $3.5 million, up 105 percent from the $1.7 million in the second quarter of 2011.
In its filing with the Securities and Exchange Commission, Cadence said it has entered into agreements with three major pharmaceutical wholesalers to supply the drug across the U.S. and that it has built its own nationwide sales force of about 150 people.
“Our near-term strategy is to work directly with physicians and hospitals to ensure hospital formulary adoption and increase demand for Ofirmev,” the company said in its SEC filing.
Shares of Cadence, which trade on Nasdaq as CADX, were at $3.81 on the afternoon of Nov. 15, down 16 cents from the previous day’s closing price. Shares dropped 21.5 percent Nov. 14 after the company announced the offering.
Deutsche Bank Securities Inc. is acting as sole book-running manager.
