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Omeros receives $25 million in funds from Vulcan Capital et al. for drug receptor program

Published: 15:18 25 Oct 2010 EDT

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Omeros (Nasdaq: OMER) said Monday it has received $20 million from investment firm Vulcan Capital along with a $5 million grant award from Washington State's Life Sciences Discovery Fund to support the advancement of the company's G protein-coupled receptor (GPCR) program, a drug platform targeting a wide range of indications.

In exchange for the funds, Vulcan Capital and LSDF have a right to receive a percentage of proceeds generated by the GPCR program, including profits from specified partnership arrangements and product sales, net of all research, development and associated commercialization expenses.

In addition, Omeros has issued three five-year warrants to Vulcan, each good for the purchase of 133,333 Omeros shares, with exercise prices of $20, $30 and $40 per share, respectively.

"We believe Omeros' GPCR platform has the potential to accelerate new pipeline development across a broad range of highly attractive drug targets and can make a significant impact on the pharmaceutical industry," said managing director of Vulcan, Steve Hall.

GPCRs, which mediate key physiological processes in the body, are one of the most valuable families of drug targets. According to Insight Pharma Reports, GPCR-targeting drugs represent 30 to 40% of marketed pharmaceuticals.

There are approximately 120 GPCRs with no known molecules that bind with receptors, or ligands, which are termed "orphan GPCRs". Without a known ligand, drug development for a given receptor is extremely difficult.

Omeros uses a high-throughput test to identify small-molecule agonists and antagonists for orphan GPCRs, unlocking receptors to drug development. The company believes that there may be more than 65 new drugable targets among these orphans.

There are a broad range of indications linked to orphan GPCRs including cardiovascular disease, diabetes, Alzheimer's, Parkinson's, MS, schizophrenia, autism, osteoporosis and several forms of cancer.

"Omeros has already demonstrated the capability to identify compounds that interact with orphan GPCRs, providing the company multiple opportunities to capitalize on its platform," Hall added.

Under the terms of the agreements, the percentage of payment decreases as the cumulative net proceeds reach specified thresholds. After Omeros has received approximately $1.5 billion of cumulative net proceeds, the percentage payable to Vulcan and LSDF combined decreases to 1%, it said.

In conjunction with the Vulcan deal, Omeros has agreed to purchase from Patobios Limited assets related to a GPCR assay technology, comprised of patents and other intellectual property rights, for approximately C$10.8 million. Following completion of the transaction, Omeros will have no milestone, royalty or other payment obligations to Patobios.

Omeros develops and commercializes products focused on inflammation and disorders of the central nervous system. The company has five ongoing clinical development programs, including four from its PharmacoSurgery platform, the most advanced of which is in a Phase 3 clinical program, and one from its Addiction program.

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