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Horizon Pharma Takes $35M Bridge Loan to Reach IPO Day

Jan 24 2011

NORTHBROOK, Illinois— Horizon Pharma Inc., a company developing arthritis and pain medications that filed paperwork last summer for an initial public offering, has turned to insiders for a $35 million bridge loan as it keeps its wheels in motion toward an IPO, according to one of its board members.

The Northbrook, Ill.-based company acquired the loan from Essex Woodlands Health Ventures, Scale Venture Partners and Sutter Hill Ventures, according to a regulatory filing.

Jeffrey Bird, a Sutter Hill managing director and Horizon board member, said the loan will convert to stock when the company debuts on public markets, which will likely take place within the next few months.

Last April, investors merged two companies—Horizon Therapeutics Inc. and Nitec Pharma AG—in the hope of creating a drug company with a broad enough pipeline to make a successful run at an initial public offering, investors told VentureWire at the time.

Horizon acquired Nitec, a Swiss company, in an all-stock deal, and gained access to Lodotra, a rheumatoid arthritis drug approved in Europe.

At the time of the merger, Horizon Therapeutics had raised about $75 million from Essex Woodlands Health Ventures, FirstMark Capital, Scale Venture Partners and Sutter Hill Ventures, according to VentureWire records. Nitec had rounded up more than $60 million from Atlas Venture, Deutsche Bank London, Global Life Science Ventures, NGN Capital and TVM Capital.

Horizon Pharma, the new entity, has raised undisclosed funding since the merger, and the bridge loan is considered a part of the company’s last funding round, Bird said.

Horizon has said it aims to get U.S. approval of Lodotra this year. The company also has filed for U.S. approval of pain medication Duexa, which combines ibuprofen with famotidine.

In Phase III studies, Duexa was found to reduce upper gastrointestinal ulcers in patients with mild-to-moderate pain when compared to ibuprofen alone, the company previously told VentureWire.

Additionally, the company is working on a combination product, HZN-602, which is an oral drug that combines immediate-release naproxen with high-dose famotidine. The drug is being studied for its ability to reduce risk of upper gastrointestinal ulcers in patients with pain and arthritis, Horizon has said.

Attempts to reach Horizon weren’t immediately successful.

Both companies spent a great deal of money getting through the trials process, the filing said. Though Horizon is now generating revenue through sales of Lodotra, the company is still not profitable.

It had a net loss of $18.2 million for the nine months ended Sept. 30, 2010, and its accumulated deficit was $98.2 million as of the same date.
http://www.horizonpharma.com

by Timothy Hay
VentureWire Lifesciences Newletter