Fortress Biotech takes out $60M loan for debt purposes; Entasis pulls in $25M private placement for PhIII trial
Fortress Biotech, the incubator at the center of a stock market scandal two summers ago, is taking out a loan to refinance existing debt.
The company is borrowing $60 million through Oaktree Capital Management, with the loan expected to mature in five years. Fortress will pay back the loan first with quarterly installments of 11% interest until 2025, and then with the entire principal amount on the loan’s five-year anniversary, according to the SEC filing.
Fortress can also repay Oaktree before the loan matures at any time, with a prepayment fee required within the first four years.
Back in August 2018, Reuters dropped a bombshell report about how Fortress bought and used a brokerage firm, National Holdings, to tout its own startups without disclosing the connection between the two companies until reporters started asking about it. That included not informing investors in analyst notes about potential conflicts of interest.
Fortress ended up selling its 56.1% stake in National a few months later to B. Riley Financial.
Also on Friday, Fortress announced that a Menkes disease program from one of its partner companies, Cyprium Therapeutics, had met its primary endpoint of overall survival from birth. The average survival was 14.8 years compared to 1.3 years in an untreated historical control group. — Max Gelman
Entasis pulls in $25 million private placement for PhIII trial
AstraZeneca spinout Entasis Therapeutics is expected to close on a $25 million private placement with Innoviva and other investors on Sept. 1.
The company plans to sell 9,345,794 shares at $2.675 apiece. The announcement comes two years after Entasis’ $ETTX Nasdaq debut. In September 2018, the Waltham, MA-based company priced shares at $15 apiece, below a set range of $16 to $18.
Entasis plans on using proceeds to continue a Phase III trial of its sulbactam-durlobactam, used to treat pneumonia and bloodstream infections caused by carbapenem-resistant Acinetobacter baumannii. The drug, an inhibitor of Class A, C, and D β-lactamases, has been granted FDA fast-track designation. — Nicole DeFeudis
Virios files for a $35 million IPO to develop fibromyalgia drug
Alpharetta, GA-based Virios Therapeutics $VIRI announced on Friday that it’s looking to go public. The biotech filed for a $35 million raise, which it plans on using to push its fibromyalgia drug to Phase III.
The number of biotech debuts this year have already surpassed that of 2019. Companies profiting from the boom have raised more than $11 billion combined.
Virios, founded in 2012, says it will use IPO funds to complete a Phase IIb trial and chronic toxicology studies of its lead candidate, IMC-1. The antiviral therapy is designed to suppress herpes simplex virus-1 activation and replication. Virios expects to read out topline data from the IIb in early 2022. — Nicole DeFeudis
Pfizer extends another CRO, this time with Parexel
The big CRO Parexel announced a new contract with Pfizer to provide clinical development services.
Parexel will work with the Big Pharma for the next three years with an option to extend the partnership for another two. The companies have collaborated for the last decade, Parexel said in a statement.
The services will be administered across all of Pfizer’s therapeutic areas, including rare diseases, oncology, inflammation and immunology and internal and hospital-based medicines.
This marks the fourth CRO agreement Pfizer has agreed to over the last few months, adding the Parexel deal to others with Icon, Syneos Health and the PPD. — Max Gelman