Infinity restructures drug deal, raises $27.5M as it scrambles to refocus

Fast on the heels of a decision to terminate its lead drug program, Infinity Pharmaceuticals has gone back to the bargaining  table to restructure a financing deal in place with Purdue Pharmaceutical Products and Mundipharma, handing over a big chunk of stock ($INFI) worth $51 million while regaining rights to early-stage products and discovery programs. And the biotech is revving up plans for a mid-stage study of a key drug included in the restructured pact as it tries hard to change gears following a pipeline crash.

Purdue is buying $27.5 million worth of Infinity shares--which surged 11% yesterday--at $14.50 apiece and gets about 3.5 million shares at $14.50 to repay the principle and interest due on a $50 million line of credit. Mundipharma will stop covering research costs and along with Purdue gets a royalty slice on the formerly partnered products in the one-to-four percent range. Purdue is left holding 28% of Infinity's common shares.

Scrambling to reorganize after the painful failure of saridegib--which failed a slate of studies--the Cambridge, MA-based biotech is shifting its primary focus to its PI3K drug IPI-145. With this new deal, Infinity regains worldwide rights for its PI3K program, its fatty acid amide hydrolase program and early discovery programs. Infinity also says it is expanding its Phase I dose-escalation study of IPI-145 and plans to launch a mid-stage study of the drug in the second half of this year.

"Regaining worldwide rights to all of our programs, particularly our PI3K program, is an important, value creating development for Infinity," said Infinity CEO Adelene Q. Perkins in a statement. "Our strategic alliance with Mundipharma and Purdue has been key in building the company, and we are pleased that they will now participate in the value of our PI3K program as a more significant Infinity equity holder, together with our other investors."

- here's the press release

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