05 Aug Foamix Pharmaceuticals – Company raises nearly $64 million in financing to advance its Key Clinical Candidates in Rosacea and Acne
Foamix Pharmaceuticals (NASDAQ: FOMX), a clinical stage biotechnology company that is focused on creating solutions for the unmet needs in dermatology by developing topical therapies, has announced that it has secured nearly $64 million in financing from Perceptive Advisors and OrbiMed. According to a company statement, besides a $15 million upfront payment, subject to fulfilment of certain conditions, up to $50 million will be made available through term loans under a credit agreement.
In addition, the company will also receive $20 million on achieving regulatory milestones and $15 million upon fulfilling certain revenue milestones. Furthermore Perceptive Advisors will offer the company with $14 million in gross proceeds through a direct registered offering of the company’s ordinary shares.
The company plans to utilize these funds for primarily filing a New Drug Application (NDA) with the FDA for FMX103, its lead candidate for the treatment of papulopustular rosacea. It is also planning to launch FMX101 for the treatment of moderate to severe acne and fund its working capital and general corporate requirements.
David Domzalski, CEO of Foamix opines,
“As we manage the transition of Foamix to becoming a fully integrated commercial organization it is important that the company is financed appropriately. Combined with our current cash position, we believe these initial investments, along with future access to capital which this transaction provides, will allow us to fund the commercial launches for FMX101 and FMX103, pending FDA approval.”
The company manufactures an array of foam based topical applications using its proprietary technology which offers improved tolerability, ease of use, high solubility and penetration and targeted drug delivery.
According to its first quarter 2019 financial results, the company had cash and cash equivalents of $82.9 million as of March 31, 2019, as against cash and cash equivalents of $99.4 million as on December 31, 2018.
Roascea affects over 415 million people worldwide, and more than 16 million in the U.S alone, according to research conducted by the University of Copenhagen, Denmark. It is a fairly common skin disorder, but only 18 percent of Americans afflicted with this condition are under medical treatment. This chronic condition often manifests as a flare up or reddening of the skin and progresses to formation of pustules or small blood vessels that are visible. In severe cases the disease can also affect the eye causing irritation, redness and the appearance of watery or bloodshot eyes.
Acne is one of the most common skin disorders in the U.S affecting over 50 million people annually. An estimated 85% of young adults aged between 12-25 year suffer from it according to the Global Burden of Disease (GDB) study. The rise in androgen levels during puberty, growing environmental pollution, stress and unhealthy lifestyles are some of the causative factors of Acne. It causes considerable self –image and confidence issues in people leading them to seek treatment.
The first course of treatment for Rosacea and Acne is the prescription of antibiotics such as Topical clindamycin and erythromycin. In spite of being effective these are not preferred as monotherapy options owing to the risk of developing bacterial resistance. Tetracyclines such as minocycline have the lowest resistance rates and are now increasingly being used to come up with novel drugs to treat Acne. Conventional therapeutics have limitations such as side effects, misuse for purposes otherwise stated, nausea and birth defects.
The Rosacea treatment market is estimated to be worth over USD 2.6 billion by 2025, according to a report by Grand View Research. While the ACNE Treatment industry is poised to reach $7.0 billion by 2024 according to a report by Global Market Insights, Inc growing at a CAGR of 6.9% during the forecast period, owing to growing awareness about treatment options.
There is currently no cure for these disorders, with existing treatment options only aiming at alleviating the symptoms associated with the illness. The industry is moving from small molecule based medications to peptides, combination therapies and biologics.
FMX103, is Minocycline foam (1.5%) for the treatment of Moderate-to-Severe Papulopustular Rosacea, which on approval, will be the first FDA-approved topical minocycline treatment for this condition. The company has already released the Top-line results for first two Phase 3 pivotal studies and is in the process of filing an IND with the FDA.
Additionally, the company’s candidate for the treatment of inflammatory lesions of non-nodular moderate-to-severe acne vulgaris is FMX101; it is a potential first-in-class Minocycline foam (4%), which has received a New Drug Application status from the FDA with a Prescription Drug User Fee Act (PDUFA) action date of October 20th, 2019
Its proprietary foam technology uses a hydrophobic composition and offers multiple advantages such as safe and stable delivery of the inherently unstable APIs, absence of primary irritants, ease of use to name a few.
- The company is on the verge of commercializing its treatment foam for Acne and Rosacea, pending approval from the FDA. The results from its clinical trials have been positive and encouraging. This augurs well for its pipeline and future prospects.
- The demand for Acne and Rosacea treatment solutions is here to stay, owing to a steady rise in pollution, lifestyle changes and increasing skin allergies. The need for maintaining a social image and grooming needs will ensure a steady demand for its products.
- Foamix pipeline is heavily focused on Acne and Rosacea, it will need to diversify and add more therapeutic areas quickly, in order to be relevant and ahead of its competitors.
- The company will need to find partners or enter into licensing agreements for its pipeline products, which will help in expansion as well as take care of its capital requirements.
We believe that Foamix Pharmaceuticals can leverage its proprietary platform to develop a plethora of innovative foam formulations for dermatological and other conditions. The company’s robust patent portfolio will afford it protection and ensure a steady market for its products, once approved.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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