Tuesday, April 7, 2009

Epix raises money via sale of notes, Vasovist rights

By Mass High Tech staff

Lexington-based biopharmaceutical Epix Pharmaceuticals Inc. made two announcements today of efforts to raise money. The company reported that it has sold U.S., Canadian and Australian rights to its MS-325, a blood pool magnetic resonance angiography agent, for $28 million to North Billerica-based Lantheus Medical Imaging Inc. Epix (Nasdaq: EPIX) also said today that it has begun an exchange offer for $100 million in convertible senior notes.

The sale of rights for MS-325, which is sold as Vasovist by Bayer Schering Pharma, requires Epix to pay $10.5 million to Bayer in order to meet U.S., Canadian and Australian development costs. Epix will retain rights to the drug in Europe and elsewhere, outside of the U.S., Canada and Australia. Vasovist is used to treat adults peripheral vascular disease and has been approved for marketing in 37 countries outside of the U.S. Lantheus provides imaging products used to diagnose cardiovascular conditions.

Epix president and CEO Elkan Gamzu said the net proceeds of the Vasovist sale will apply to the company’s exchange offer of all of its 3 percent senior convertible notes in exchange for common stock shares and a cash payment. The company said it has almost 42 million outstanding shares of common stock. The exchange offer ends on May 4, 2009.

Epix, in the notes related to the offering, stated, “If Epix is unable to restructure its obligations under the Notes, it may be forced to seek protection under the United States bankruptcy laws.”

Epix concentrates on creating new drugs based on its proprietary and in silico drug discovery platform. The company’s pipeline includes drugs to treat diseases of the nervous system and lung conditions. The company reported a loss of $36.7 million for fiscal 2008 on revenue of $28.6 million.