By Christopher Zinsli 
   Of DOW JONES VENTUREWIRE 
 

The four largest investors in Pacira Pharmaceuticals Inc. have committed up to $15 million to the drug developer, which is attempting an initial public offering to bring its post-surgical pain management treatment Exparel to market.

HBM BioVentures, MPM Capital, OrbiMed Advisors and Sanderling Ventures purchased equal portions of the convertible-note offering, which was disclosed Monday in the Parsippany, N.J.-based company's latest IPO prospectus.

Half of the $15 million was funded on Dec. 29, 2010. The other half will be funded upon the agreement of at least three-quarters of the note holders. The notes will convert to common stock when the company completes its IPO.

Pacira also issued the four venture firms warrants to purchase up to 3.6 million shares of its common stock. The warrants, which were split in two equal closings along with the notes, carry an exercise price of $1.25 a share.

Pacira's board has increased the company's estimated share value by more than threefold in the past three months, to $0.51 a share as of Dec. 29, from $0.15 as of Sept. 30. The company attributed the increase to various developments that position it to launch its lead product, Exparel.

Between September and the end of last year, Pacira has filed a New Drug Application for Exparel with the Food and Drug Administration, registered for an IPO, entered into a $26.25 million credit facility with Hercules Technology Growth Capital Inc. and completed the new sale of convertible notes.

Pacira expects a decision from the FDA regarding its NDA by July 28. Exparel has completed two pivotal Phase III trials with positive results, following a pair of disappointing trials in 2009. The company also is developing Exparel for nerve block and epidural administration.

Pacira was acquired from British drug developer SkyePharma PLC (SKYEY, SKP.LN) in 2007 by the four venture firms. The company sells two other products, DepoCyt(e) and DepoDur, under licensing arrangements.

Total revenue for the first nine months of last year was $12.4 million, up from $10.7 million over the same period of 2009. The company has generated increasing revenue each year since at least 2007, but it remains unprofitable. Its accounting firm has expressed doubt about the company's ability to continue as a going concern.

Pacira has applied to list on the Nasdaq Global Market under the symbol PCRX. Lead underwriters for the offering are Barclays Capital and Piper Jaffray.

(This story was also published in Dow Jones VentureWire, a daily publication that covers news about start-ups and venture capital.)

-By Christopher Zinsli, Dow Jones VentureWire; 212-416-2034; christopher.zinsli@dowjones.com

 
 
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