Cougar Biotechnology Inc., a Los Angeles biotechnology company with three experimental cancer drugs, announced last week it had gone public through a reverse merger and also completed a $47.5 million private placement.
Cougar merged with a wholly owned subsidiary of Century City-based SRKP 4 Inc., which according to regulatory filings was incorporated last May as a shell company whose business plan was to merge with an established company.
SRKP 4 was renamed Cougar Biotechnology Inc. following the merger. Cougar officers and directors replaced all of the officers of SRKP 4; stockholders of the private company now hold 100 percent of the new company's equity in the same proportion as they owned of Cougar.
Proceeds from the private placement will be used primarily to fund continued clinical development of Cougar's drug portfolio, which the company licensed from the original developers. One drug, CB7630, is in early-stage trials for prostate cancer. CB3304 is in trial for non-Hodgkin's lymphoma, and CB1089, an analog of vitamin D, is under study as a treatment for a form of prostate cancer.
The company hopes to have all three drugs in larger mid-stage human trials by the end of the year, said Chief Executive Alan Auerbach during last month's SoCal Bio Investor Conference in Los Angeles. The company has worldwide rights to its pipeline drugs, which were licensed from Atlanta-based Emory University, London-based BTG plc, and Ballerup, Denmark-based LEO Pharma.
Auerbach, a former Los Angeles-based biotech industry analyst, said Cougar was formed after he was approached in late 2002 by venture capitalists who wanted to work with him to bring to market promising cancer drugs. "As a sell-side analyst one of the things you learn is how to correctly build a company by learning from the successes and failures of other companies," he said. "I've always wanted to have my own company."
Adage Capital Management LP was the lead investor in the latest financing, which also included significant participation from Brookside Capital Partners Management LLC, funds managed by T. Rowe Price Associates, Merlin Biomed Group, RA Capital Management LLC, and Tavistock Life Sciences, as well as other health care institutional investors. Cowen & Co. LLC and Paramount BioCapital Inc. acted as co-placement agents for the placement.
The private placement of approximately 27.5 million units of its securities to institutional and other accredited investors resulted in gross proceeds of $47.5 million, which includes the conversion of approximately $7.8 million of previously issued debt.
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