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12:00 AM
 | 
Jan 12, 2009
 |  BioCentury  |  Strategy

Looking for infinite runway

With investors demanding to see companies with long runways, Infinity Pharmaceuticals Inc. says its twin deals to develop and commercialize potentially all of its early clinical and discovery programs with Purdue Pharma L.P. and Mundipharma International Ltd. have freed the company from having to access the equity markets until at least 2012, while giving it the ability to retain U.S. marketing rights to all except one of its compounds.

Last week, the company received a $30 million second tranche of an equity investment from Purdue, and has now taken in $75 million since the deal was announced in November, after the economic meltdown was well underway.

According to Chairman and CEO Steven Holtzman, the economics of the deals and Infinity's retention of U.S. marketing rights give the company both sufficient capital to carry it beyond the current financial crisis and the independence to develop its pipeline and mature into a commercial company.

At Sept. 30, Infinity had $80.8 million in the bank, providing cash through 2010.

Last week, Purdue purchased 2 million shares and 6 million warrants at $15 per unit. Infinity received a first tranche of $45 million through the purchase of 4 million shares at $11.25 per share, which was a 112% premium to Infinity's closing price of $5.29 on Nov. 19, the...

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