Replies to post #102094 on Biotech Values

[mcbio]

Re: ACHN $50M PIPE

ACHN raises $50M in PIPE from Domain Associates, Clarus Ventures, Quaker BioVentures, and Pappas Ventures:

sec.gov/Archives/edgar/data/1070336/000119312510193288/d8k.htm

The offering is for 19.8M units where each unit consists of one share and 0.35 warrants. The increase in fully-diluted shares is thus (19.8)(1.35) = 26.7M, which is roughly a 65% expansion in the fully-diluted share count.

The per-unit price is $2.615/sh. The 6.9M warrants are exercisable at $3.11 for a period of seven years. If all of the warrants are exercised, the warrants will produce an additional $21.6M in cash for ACHN and the effective result of the PIPE will be to raise $71.6M at an average share price of $2.68.

Adding the $50M PIPE proceeds (excluding potential warrant exercises) to ACHN’s 6/30/10 cash balance of $19.5M, ACHN now has $69.5M less whatever it has burned during 3Q10 to date.

Claris and Pappas already had seats on ACHN’s BoD, and Domain is contractually entitled to obtain one seat on the BoD as a result of this PIPE.

Suffice to say I'm a bit disappointed to see this news as it tells me that no partnership for ACH-1625 is on the near-term horizon. ACHN will clearly be running the next Phase 2 trials for 1625 on its own dime, although the company of course now has sufficient cash to do so given the significant dilution. Either ACHN didn't like the terms of the partnership offers it received from big pharma for 1625 or the company received no formal offers. I imagine in either scenario that prospective partners want to see longer-term data for 1625 before offering any lucrative partnering deal.

I am pleasantly surprised to see that the stock has held up well so far given this news. It looks like I will be holding my position for awhile now (at least through Phase 2 results for 1625).

[mcbio]

ACHN - 8/19/10 Update Call

http://ir.achillion.com/eventdetail.cfm?eventid=85265

1. Given the significant offering, ACHN expects it can run its existing level of operations through 2012.

2. ACHN will dose the first patient in the Phase 2a trial for ACH-1625 by the end of September.

3. The Phase 2a trial will consist of two cohorts with a total of over 100 patients. The trial will start in the U.S. and also be expanded into Europe. The first cohort will be a 28 day study testing three dose levels of 1625 in combo with pegIFN+riba versus a control of pegIFN+riba. ACHN will obtain RVR @ the 28 day mark and will report this data by the end of 1Q2011. All three 1625 doses will be QD doses and will be either 200mg QD, 400mg QD, or 800mg QD.

The second cohort will follow the same protocol but will be a 12 week study utilizing the two best doses from the first cohort. This data will be reported by YE2011.

4. INDs are expected to be filed for ACH-2684 (3rd gen PI) and ACH-2928 (the NS5A inhibitor) by 1H2011 with PoC data expected by YE2011. ACHN has seen significant synergy between ACH-2928 and 1625.

5. ACHN expects to initiate combo studies of 2928 and 1625 by 2012 and have 28 day Phase 2 PoC data for this combo by YE2012.