Philadelphia Business Journal | John George | September 26, 2012
NuPathe Inc, which is developing a treatment for migraine headaches, has raised $28 million in a private stock sale involving existing and new investors, and plans “cost-containment measures.”
The Conshohocken, Pa., specialty pharmaceutical company sold its securities as units, priced at $2 each, with each unit consisting of 1/1,000th of a share of to-be designated Series A preferred stock and a warrant to purchase one share of the company’s common stock.
Each 1/1,000th of a share of Series A preferred stock will initially be convertible into one share of common stock, accrue quarterly dividends at an initial rate per annum of 8 percent and have a liquidation preference of $2.00. The warrants will initially be exercisable at $2.00 per share and will expire five years from the date of issuance.
NuPathe (NASDAQ: PATH) officials said in conjunction with the private placement, the company plans to implement “cost-containment measures” to focus its resources on its primary goal: obtaining approval for its migraine patch product Zelrix. The company said it has restructured a loan, but it did not disclose what other cost-cutting actions are being planned.
“We believe this financing, combined with the cost-containment measures we expect to implement, will provide the financial resources necessary to fund our operations for approximately one year and, importantly, to obtain approval for NP101 (Zelrix),” said Armando Anido, who took over as CEO of NuPathe from company founder Jane Hollingsworth in July. “Our focus will be on generating shareholder value by obtaining approval of NP101, seeking a commercial partner and conducting pre-launch activities for this valuable new treatment.”
The Food and Drug Administration last year rejected NuPathe’s initial new drug application for Zelrix. NuPathe resubmitted its application in June, addressing chemistry, manufacturing and safety questions raised by the agency. The FDA expects to make a decision on the new application in January.