B.C. Industry News

Biotechnology Focus — Aurinia Pharmaceuticals completes $56 million private placement

February 21, 2014

Biotechnology Focus

Victoria-based biotech company Aurinia Pharmaceuticals Inc. has completed a $56 million private placement.

The company says it intends to use the net proceeds from the offering to advance clinical and nonclinical development of its lead drug candidate, voclosporin, a drug for treating lupus-related kidney infection. The offering represents the largest traditional PIPE (private investment in public equity) financing by a life sciences company in Canadian history.

The financing was led by venBio, New Enterprise Associates (NEA), Redmile Group, RA Capital Management, Great Point Partners, and Apple Tree Partners, with participation from various other institutional investors, including existing shareholders Lumira Capital, ILJIN Life Science Co. Ltd. and Difference Capital.

“We greatly appreciate the confidence shown by such high-quality life science investors in leading this financing,” commented Stephen Zaruby, Aurinia’s president and CEO. “This has provided us with the necessary resources to begin implementing our strategic plan, including the launch of a Phase 2B study of voclosporin in lupus nephritis.”

Details of the Offering

Under the terms of the offering, Aurinia issued 18,919,404 units at a subscription price per unit of $3.038, with each unit consisting of one common share and one-quarter (0.25) of a common share purchase warrant, exercisable for a period of five years from the date of issuance at an exercise price of US$3.2204 (C$3.56). In addition, in the event that the company does not reduce the size of its board of directors to seven directors within 90 days following closing, an additional 0.1 Warrants will be issued for each unit purchased by a subscriber for every additional 90 day period delay, up to a maximum of 0.35 Warrants per Unit. This represents a maximum of 6,621,791 additional Warrants.

Moreover, if the company does not obtain approval to list its common shares on NASDAQ within 12 months following the closing, the company has agreed to issue an additional 0.1 Warrants for each Unit purchased by a subscriber for every 90-day period delay, up to a maximum of 0.35 Warrants per Unit. This represents a maximum of 6,621,791 additional warrants.

Leerink Partners LLC acted as lead placement agent and Cannacord Genuity Inc. acted as co-placement agent for the offering. The offering is still subject to regulatory approval.