Arca Biopharma says it may close if funding drive fails

BROOMFIELD — Arca Biopharma Inc. hopes to raise $20 million to pay for a clinical trial for its atrial fibrillation heart drug candidate, according to a document filed with the Securities and Exchange Commission.

Broomfield-based Arca (Nasdaq: ABIO) said if it does not raise enough money, it may close by Oct. 1, according to the SEC document. The new stock offering is scheduled to close on Tuesday, June 4. The company expects $18 million in net proceeds from the stock offering after expenses. Dawson James Securities Inc. is the agent for the offering.

The money will be used to fund a “2b” clinical study of its drug candidate Gencaro on atrial fibrillation patients. Atrial fibrillation is the formal name for irregular heartbeat. Drugs cannot be sold to consumers in the United States until three rounds of successful clinical trials on humans have been approved by the Food and Drug Administration. The clinical trial process often takes 10 years or more to complete.

Arca plans to issue about 125,000 shares of Series A convertible preferred stock together with warrants to purchase about 6.25 million shares of common stock, according to the SEC document. Each share of preferred stock and its related warrants will be sold at a purchase price of $160, with each share of Series A preferred stock convertible to 100 shares of common stock, according to the SEC document.

Each investor will receive a warrant to purchase 50 shares of common stock for each share of preferred stock.

Arca has an agreement to use a heart monitor made by medical device company Medtronic Inc. (NYSE: MDT) to conduct the trial.

Arca lost $4.3 million in 2012, following a loss of $5.4 million in 2011, according to the company’s annual reports. It has been in danger of being delisted from the Nasdaq stock exchange several times because its stock price has fallen below $1 per share.

You have 2 free articles remaining this month.
Want to see more? Login or Subscribe.

Leave a Reply

Your email address will not be published. Required fields are marked *


Social Network

Facebook Icon
Twitter Icon
LinkedIn Icon
©2016 BizWest The contents of this website are copyright BizWest Media, LLC. All rights reserved.
Use of any of this informatino or media on this site is strictly prohibited withotu express written consent.