Monday, October 27, 2008

Acusphere signs $20M debt financing agreement with Cephalon

By Mass High Tech Staff

Watertown-based pharmaceutical company Acusphere Inc. has announced a $20 million debt offering agreement with biopharmaceutical firm Cephalon Inc., set to close in 10 days. The company also received Nasdaq approval to bypass shareholder approval in making the debt offering to Cephalon.

The $20 million in financing consists of $15 million in a senior secured convertible note and $5 million for an exclusive worldwide license for Acusphere’s AI-525 injectable form of anti-inflammatory drug, celecoxib.

Acusphere (Nasdaq: ACUS) CEO and president Sherri C. Oberg said in a statement that the agreement would help finance the U.S. Food and Drug Administration approval process of the company’s Imagify, its investigational injectable imaging drug developed to detect coronary artery disease using ultrasound, and possibly move the drug to partnership with Cephalon.

The three-year, $15 million convertible note can be paid in cash or common stock, at Acusphere’s choosing. Cephalon may choose, before the end of the first year of the agreement, to convert the note into a license for Imagify, Acusphere common stock or a $15 million credit in anticipation of a FDA approval of AI-525.

The Nasdaq exception to stockholder approval required Acusphere to show its financial vulnerability that would result from waiting for shareholder approval.

In August, Acusphere announced it had been warned by Nasdaq that its shareholder equity has fallen under the minimum $10 million, and its stock could be delisted.

In July, Acusphere reduced its staff by 24 employees, almost a quarter of its staff. The cuts were made in the company’s manufacturing group responsible for making Imagify.

Also in July, the company received another notice of potential Nasdaq delisting, this one for failing to maintain a bid price of at least $1 per share.

In March, the company licensed its drug-delivery technology for the treatment of cancer to Cephalon for $10 million cash.

Acusphere reported a 2007 loss of $53.7 million on revenue of $2.7 million.