12:00 AM
Apr 24, 2006
 |  BioCentury  |  Finance

Ebb & Flow

Acqua Capital marked its return to biotech investing last week with its largest ever financing facility - a $200 million equity line for cardiovascular play CV Therapeutics (CVTX). Although the deal was with a longtime client - Acqua (then Acqua Wellington) provided CVTX with a $120 million equity line in 2000 - the firm maintains that it's open to new names as well.

Indeed, the firm's sweet spot will be biotechs valued between $150 million and $1.5 billion. Acqua's Isser Elishis told Ebb & flow the firm wants to set up 15-20 equity facilities with biotech companies.

But companies and bankers thinking about calling on the firm for investments probably should reconsider. The reason, said Elishis, is that "we do mostly open market purchases and don't really invest in PIPEs or converts. With all the volatility in biotech, I don't like the concept of launching my whole investment in one bullet. PIPEs make you put too much money to work at once. I'd rather go into the market and buy whenever I want."

The firm "likes to complement open market purchases with financing facilities," he said. "It lets you put a lot of money to work, but you get to pick your moments. We like to first make the open market purchases, then later approach the company for the financing facility. From there, every dollar you invest is accretive because you're helping to remove the company's financing risk" with every draw down.

Acqua started investing in biotech around 1997 and exited the sector in 2002 on the backside of the genomics bubble.

Symphony collects a toll

Dynavax's bumped-up follow-on in the fourth quarter of 2005 left it with more than $75 million in cash at year end, but that's not enough to pay for clinical development of more than a handful of compounds. But instead of another dilutive equity round to support all of its clinical and research-stage projects, DVAX last week out-licensed a trio of earlier stage programs to Symphony Dynamo, a company formed by merchant bank Symphony Capital.

The deal is...

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