Hungry for cash to advance its lead depression drug to the market, Newton, MA-based biotech firm Clinical Data (NASDAQ:CLDA) has raised $50 million in a convertible debt financing. The funding came from investment affiliates of Clinical Data’s chairman, Randal Kirk, according to the company.
Clinical Data says that the new funding will support the firm this year as it wraps up its second late-stage clinical trial of its depression drug, vilazodone, and its planned application for FDA approval of the treatment. The cash will also be spent on a late-stage trial for apadenoson (Stedivaze), which is being developed as an imaging agent to diagnose cardiac stress.
The new capital isn’t likely to sit in the bank very long. Clinical Data, in its most recent reported fiscal quarter ending December 31, 2008, said its expenses for the last three months of the year totaled $26.5 million. At that rate, this new $50 million would last less than six months. Indeed, the company reports that the expense of its current clinical trial for vilazodone was a major factor behind its $15.5 million research and development budget for that quarter, a 99 percent jump from the $7.7 million it spent on R&D in the same period in 2007.
“These late-stage drug candidates address large, rapidly growing markets where new and clearly differentiated products are needed,” says Clinical Data CEO Drew Fromkin, in a statement. “We are devoting the majority of our resources toward realizing their full commercial potential.
The payoff of all this spending could be huge if vilazodone garners FDA approval, as the annual market for antidepressants is a whopping $12 billion, according to Clinical Data. The firm, which expects to report results of the latest vilazodone study in the first half of 2009, says that it if all goes well with the trial it plans to apply for FDA approval of the drug by the end of the year. The company also says that a genetic test could be used to show physicians whether a patient is likely to respond to the drug.