Arca hopes stock sale raises $20 million

BROOMFIELD – Cardiovascular drug research company Arca BioPharma Inc. plans to raise $20 million to pay for a late-stage trial of its drug candidate Gencaro, according to a U.S. Securities and Exchange Commission document.

The Broomfield-based company (Nasdaq: ABIO) said in the document that the per-share stock price for the transaction would be $2.80. The planned date of the stock sale was not mentioned in the document dated March 25, which said only that information was “subject to completion.”

Arca BioPharma disclosed in an SEC filing on Friday that the company may discontinue operations if the company is delayed in obtaining funding.

The funds will be used to see if drug candidate Gencaro can help patients who have atrial fibrillation, the formal name for irregular heartbeat. In general, patients who have atrial fibrillation are predisposed to getting blood clots, which potentially result in stroke, according to the SEC document. Atrial fibrillation affected about 2.7 million Americans in 2010, according to the document.

In the new study, Arca BioPharma plans to test the efficacy and safety of Gencaro on 200 heart disease patients, according to the SEC document. The study may start six months after the company raises the money, and could take about two years to complete, according to the document.

Arca plans to collaborate with Medtronic Inc. (NYSE: MDT) on the study, with Medtronic monitoring data on its proprietary devices. The Minneapolis-based medical device company has an office in Louisville.

In general, getting necessary Food and Drug Administration approval to sell research drug candidates can take 10 years or more, according to people in the industry.

Arca lost $4.3 million in 2012 following a loss of $5.4 million in 2011, according to its annual report.

Arca said last week that it may seek additional interim funding that could allow it to operate while pursing financing options, a strategic combination, partnering and licensing opportunities.

Arca has been in danger of being delisted from the Nasdaq stock exchange on several occasions because its stock price has fallen below $1 per share.

In the past 52 weeks, the stock has traded in a range from 23 cents to $1.15. Arca has received delisting notices from Nasdaq in each of the past three years, according to SEC documents. The company regained compliance in 2010, 2011, 2012 and 2013.

Arca completed a reverse stock split to raise its per-share trading price and regain compliance with Nasdaq stock market rules on March 4. As a result of the reverse split, every six shares of issued and outstanding common stock were combined into one.

The market value of Arca’s listed securities is $8.7 million. Arca’s stock was trading at $2.37 per share at 10 a.m. Wednesday.

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