Brickell Biotech stock soars on lawsuit settlement, $30M funding commitment

BOULDER — Trading volume for Brickell Biotech Inc. (Nasdaq: BBI) shot up by 32 times its average Tuesday morning after the company settled a months-long lawsuit from a competing dermatology lab and secured up to $30 million in funding from stock sales over the next three years.

The Boulder biopharmaceutical company agreed to issue $1 million in cash and an undisclosed amount of stock and future royalty payments to Miami-based Bodor Laboratories, according to filings Tuesday morning with the U.S. Securities and Exchange Commission.

Brickell will retain rights to develop and sell sofpironium bromide, a treatment for excessive underarm sweating.

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“Resolving the dispute with Bodor at this time is, on balance, in the best interest of our stockholders as it permits Brickell to continue to advance our lead product candidate without the cloud of litigation,” CEO Robert Brown said.

Bodor first sued Brickell last October over a series of alleged bad-faith practices over a licensed anti-sweating treatment, including claims that Brickell tried to patent the technology as its own. The suit has been in arbitration as of last December after initial settlement talks faltered, which led to Brickell’s largest investor pulling $25 million in milestone payments.

Brickell’s chief medical officer announced his resignation from the company last week but will continue with the company as an advisor. The company said it now expects to release initial results for a Phase III long-term safety study of sofpironium bromide by the end of the quarter.

The company also said it sold $2 million in new stock to Chicago-based venture firm Park Capital Fund LLC, along with up to $28 million in additional stock purchases over the next 36 months. While that figure covers the funding lost from the lawsuit, it is well below the $75 million mixed-shelf offering Brickell announced last week.

Brickell stock jumped from a starting price of $1.36 to as high as $2.16 in early trading Tuesday before settling to $1.65 per share at close, a gain of 42.24 percent.

This story has been updated to reflect Brickell’s closing stock price at the close of trading Tuesday.

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