12:00 AM
Oct 08, 2007
 |  BioCentury  |  Finance

Ebb & Flow

MannKind (MNKD) has pushed itself closer to the top of a short list of biotech companies that have raised in excess of $1 billion without having a product on the market.

Last week, the company raised $250 million in two registered direct offerings totaling 27 million shares, nudging its total financing to more than $1.4 billion.

Chairman and CEO Alfred Mann purchased 15.9 million of these shares at Monday's close of $9.41. Two groups of undisclosed investors, including accounts managed by Legg Mason, bought 11.1 million shares at $9.03 per share, a 4% discount to MNKD's close on Monday. The shares were sold from an existing shelf registration.

At June 30, Mann and his family owned 42.4% of the 73.5 million MNKD shares outstanding. He now has invested $566 million in the company, but has committed to putting even more skin in the game, as Mann also established a new $350 million credit facility for MNKD, which replaces a previous $150 million loan agreement.

At June 30, the company had $284 million in cash, including the $150 million loan arrangement. Its six-month operating loss was $145 million, and its accumulated deficit at June 30 was $933 million.

The financings are expected to fund MNKD through 3Q09 and the launch of its first product. The company plans to submit an NDA in December 2008 for its Technosphere Insulin System, which is in Phase III testing to treat diabetes (see "Big Raisers").

The company's only other clinical compound is MKC1106-PP. The DNA vector with two synthetic peptides is in a Phase I trial to treat solid malignancies.

The stock gained $1.51 (16%) to $11.19 on the week.

Exit first, close later

Gilde Healthcare Partners has just closed its latest fund, but it already has achieved an exit from one of the fund's portfolio companies.

Last week, Gilde Healthcare II (GHC II) closed at E150 million ($214 million), a bump up from the E125 million it had originally targeted. The Dutch firm had a first close of E85 million in July 2006.

Gilde has already put money from GHC II in three biotechs, including Amsterdam Molecular (Euronext: AMT). The gene therapy company did a E50 million ($66.9 million) IPO in June, only nine months after its A round in October 2006.

The first close was almost entirely from returning investors from Gilde's first fund, General Partner Pieter van der Meer told Ebb & Flow. The additional funds for this close came primarily from two undisclosed institutional investors.

van der Meer said investors were drawn by Gilde's diversification into therapeutics, diagnostics, medical devices and enabling technologies. In addition, he said, investors responded to the firm's approach to look at business model and management first and then evaluate the technology.

Gilde has exited five of the 12 portfolio companies from its first fund, with two trade sales, two mergers and one IPO. van der Meer hopes two more GHC I companies will go public by year end.

One of the high profile exits from GHC I was Glycart, the antibody, cancer and autoimmune company acquired by Roche (SWX:ROG) for CHF235 million ($181.5 million) in...

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