Friday, 4 October 2013

Pivotal Therapeutics to raise $5 mln through debt financing, $2.7 mln equity raise completed

Pivotal Therapeutics (OTCQX:PVTTF) (CNSX:PVO), a specialty pharmaceutical company with a focus on Omega-3 therapies for cardiovascular disease (CVD), says it has agreed to a C$5.0 million debt financing with a major shareholder as part of its non-brokered private placement, after approaching the close of the equity portion of the fundraising. 
The debt financing agreement, which consists of convertible promissory notes and warrants, will be led by existing shareholder and U.S. institutional fund, Crossover Healthcare Fund, according to the Canadian company's release Wednesday. These funds will be used to expand Pivotal's sales and marketing efforts, as well as to advance ongoing clinical trials and for general working capital needs, including business development. 
Pivotal already raised C$2.7 million through the equity portion of the financing by issuing 12.46 million units at 22 cents each, with the debt agreement to continue the fundraise. Under the terms of the debt financing agreement, Pivotal said the notes are convertible at 25 Canadian cents per share, and when closed, total proceeds raised from the equity and debt financings will amount to C$7.7 million. 
The specialty pharmaceutical company is working to fully commercialize its Vascazen FDA-regulated medical food product, which was developed to lower cardiovascular health risks in Omega-3 deficient cardiac patients. This includes high triglycerides, or fatty substances in the blood that are associated with coronary disease. The product is available with a prescription in all major pharmacies throughout the U.S.
"We are pleased to have a quality, healthcare focused institutional partner who sees the potential in our business strategy and the unique offerings VASCAZEN brings to the market," said president and COO, Rachelle MacSweeney. 
The financing, under which units consisting of C$1,000 of convertible notes and warrants to purchase 1,200 common shares will be issued, is expected to close by the end of this month. Every warrant will allow the holder to purchase additional shares at a price of 30 Canadian cents apiece. 
"The funds we have raised to date have allowed the company to move forward with its sales and marketing initiatives and increase awareness of our lead product VASCAZEN® across the U.S." said CEO Eugene Bortoluzzi in the release.  
Currently, the company's sales reps are focused on marketing the product on the eastern seaboard in the U.S., which it says contains the highest prevalence of cardiovascular disease-related illness in the nation. The 90 percent-pure Omega-3 product, which was introduced in the U.S. in November 2011, provides those suffering from heart disease with levels of the most important Omega-3 fatty acids in fish oil – EPA and DHA – that the company says are ideal, and cannot be achieved just through simple changes in diet alone.
Indeed, in the second quarter, the company revealed that results from a clinical trial showed that after eight weeks of treatment with its Vascazen product, there was an increase of 121 per cent in the Omega-Score and 112 per cent in the Omega-Index - both diagnostic tests that measure circulating blood levels of Omega-3 in individuals. Subjects also benefited from an 48 per cent triglyceride reduction, and increased levels of HDL - known as the "good cholesterol".
For the three months that ended June 30, sales of the company jumped to $93,189 from $26,408 in the second quarter a year ago.

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