Wednesday, February 11, 2009

Clinical Data Running Out of Cash?

Randall Kirk, Adenosine Therapeutics, Avalon Pharmaceuticals...lots of Virginia and Maryland references in this article.

Clinical Data Running Low on Cash, Evaluating Options
February 11, 2009

GenomeWeb Daily News

NEW YORK (GenomeWeb News) – Clinical Data disclosed in a 10-Q filing this week with the US Securities and Exchange Commission that its current cash and cash availability is sufficient to fund operations only through March 2009.

The firm, which is developing therapeutics and sells genetic tests through its PGx Health division, reported earlier this week that its third-quarter revenues declined 4 percent year over year to $10.1 million. The company also noted that as of the end of the quarter its cash and cash equivalents were $25.7 million.

Over the past six months, Clinical Data has acquired two drug firms: Adenosine Therapeutics and Avalon Pharmaceuticals. It also is in the process of conducting phase III trials for its antidepressant vilazodone, for which it hopes to file for US Food and Drug Administration approval by the end of the year.

Clinical Data said in the 10-Q that it anticipates the total remaining cash required to file the new drug application for vilazodone will be between $25 million and $30 million.

"As a result of the acquisition of Adenosine Therapeutics, components of the merger structure with Avalon and the positive acceleration of certain components of the vilazodone clinical trials, the company believes that its cash and cash availability will only be sufficient to fund its operations through March 2009," it said in the filing. "This is based on a steady state view of the company’s financials and does not assume any cash inflows from partnerships, disposition of non-core assets or other dilutive or non-dilutive financings."

Among the options Clinical Data said that it is considering to bring in additional funds are partnering opportunities with pharmaceutical or biotech companies for vilazodone, licensing certain development programs or patents from recently acquired Adenosine Therapeutics, the sale of non-core assets, and the sale of equity or debt securities.

In September 2008, the firm raised $25 million through the private placement of 1,514,922 shares of newly issued common stock to affiliates of Randal Kirk, chairman of the Newton, Mass.-based firm’s board of directors.

Clinical Data said that if it is unable to obtain additional financing or funds through partnerships or divestitures, it will be required to implement "aggressive cost-reduction strategies."

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