Suven Life Sciences, the drug research and contract manufacturing company, has decided to dilute its equity to fund the further development of its Alzheimer’s molecule, SUVN 502.
The company needs about $20 million to take the molecule to Phase II trials. The Phase I results are said to be positive and have already attracted the attention of several global drug majors.
“We are willing to dilute up to a maximum of 10% of the equity. The objective of dilution would be to fund the SUVN 502 development. We are yet to finalise the instrument to raise the fund but the fundraising would be done in the international markets,” Venkat Jasti, Suven’s managing director, told DNA.
The company is currently in the process of kicking off the road shows for equity placement from May 2010.
If all goes well, the company would complete the dilution by the third quarter of 2010-11.
Suven was pinning hopes on roping in a partner for further development of the molecule Phase II onwards.
However, with the global recession and the drug majors worldover tightening their purse strings, the strategy did not work out.
“Even the potential partners are keen on knowing the Phase IIA results before joining hands. So, we have to complete that stage and then approach a partner,” Jasti said.
The company is confident of raising at least $100 million through out-licensing of the molecule after successfully completing the Phase IIA trials.
“If things change midway and a partner comes in, we will use the fund raised through the equity dilution for developing other molecules that are waiting in the pipeline,” he said. The company has about 13 molecules, with many of them in the central nervous system area for development.