A group of venture firms led by ProQuest Investors is providing Avanir Pharmaceuticals with $40 million to fund a confirmatory late-stage trial of Zenvia and a full response to the FDA's request for more data. Avanir will issue an aggregate of approximately 35 million shares at a price of $1.14 per share unit--the market closing bid price as of March 26, 2008 plus a nominal amount for warrants--with 35 percent warrant coverage. The warrants, which represent the right to acquire up to approximately 12.2 million shares, are exercisable at 125 percent of the offering price and have a 5-year exercise term.
Avanir has had a hard time developing Zenvia, an experimental drug for involuntary emotional expression disorder. The FDA handed the biotech an approvable letter for the drug in late 2006 which outlined a demand for new data on the drug.
- read the press release
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