On May 19, 2014 Sophiris Bio reported it has entered into a common stock purchase agreement with Aspire Capital Fund. The Company intends to use the initial proceeds to support a proof of concept study of PRX302 as a treatment for localized prostate cancer (Filing 8-K , Sophiris Bio, MAY 19, 2014, View Source [SID:1234500532]). Aspire Capital has completed an initial purchase of 604,320 common shares at $3.31 per share for proceeds of $2 million and has committed to purchase up to $13 million in additional shares over the next 30 months at prices based on market price at the time of each sale, subject to a Sophiris registration statement being declared effective by the Securities and Exchange Commission (“SEC”).
“While we remain focused on our Phase 3 trial in benign prostatic hyperplasia (BPH), this financing provides us with additional financial flexibility and supports the advancement of PRX302 into another important, underserved indication. The highly targeted mechanism by which PRX302 selectively destroys prostate tissue in BPH also represents a promising treatment approach for localized prostate cancer,” said Randall E. Woods, president and chief executive officer. “The $2 million proceeds from this transaction will enable us to fund an investigator-sponsored proof of concept study in localized prostate cancer. The remaining $13 million available under the purchase agreement, if drawn down at the Company’s option, will be utilized to fund future development of PRX302 in BPH and localized prostate cancer as well as general corporate purposes.”
The Company will provide additional details around the design of the proof of concept study in localized prostate cancer upon the initiation of the study. Localized prostate cancer is a disease that is confined to the prostate gland and has not spread to the tissue and lymph nodes that surround the prostate gland or other parts of the body. PRX302 has been engineered to be activated by enzymatically active prostate specific antigen (PSA), which is found in the transition zone of the prostate as well as in prostate cancer cells. In the 126 patients studied in completed BPH clinical trials, PRX302 appears to be safe and well tolerated with no impact on erectile function.
Under the terms of the common stock purchase agreement, Sophiris will control the timing and amount of any sale of common shares to Aspire Capital. Aspire Capital has no right to require any sales by Sophiris but is obligated to make purchases as Sophiris directs, in accordance with the purchase agreement. There are no limitations on the use of proceeds, financial covenants or restrictions on future financings and there are no rights of first refusal, participation rights, penalties or liquidated damages in the purchase agreement. The purchase agreement may be terminated by Sophiris at any time, at its discretion, without any additional cost or penalty. Sophiris has issued 90,635 common shares to Aspire Capital as a commitment fee in connection with the execution of the purchase agreement. The common shares issued or to be issued under the purchase agreement will be registered for resale pursuant to a registration statement to be filed by Sophiris with the SEC. A complete and detailed description of the purchase agreement and related registration rights agreement is set forth in the Company’s Current Report on Form 8-K, filed today with the SEC.