Shares of Jaguar Animal Health ($JAGX) skyrocketed more than 70% to $2.25 on June 9 after the company struck a $15 million stock purchase deal with Chicago-based Aspire Capital Fund. Aspire immediately purchased 222,222 shares for $500,000 and will have the right to buy the rest over the next 30 months, according to a press release from San Francisco-based Jaguar, which is developing drugs to treat gastrointestinal disorders in horses, pets and food animals.
“This Agreement provides Jaguar with added balance sheet strength and flexibility to support our ongoing clinical activities and the expected commercialization of our drug product candidates,” said CEO Lisa Conte in the release.
Conte added that the agreement would be “an important asset” in potential M&A activity. The company disclosed that it has been in discussions since February with Napo Pharmaceuticals. Jaguar was originally founded in 2013 as a subsidiary of Napo, which developed a gastrointestinal drug called crofelemer for HIV patients in partnership with Salix Pharmaceuticals. Valeant ($VRX) acquired those rights in April, but Napo recently regained them, according to the release.
Jaguar began developing crofelemer for use in animals and was spun out of Napo with an initial public offering in May 2015. But it has been struggling to gain traction on Wall Street. After delaying its planned $70 million IPO, it managed to raise only $20 million, and its stock has fallen sharply from its $7 offering price since then. The company secured $8 million in debt last summer than managed to pull off a $5 million secondary offering. Napo owns about 26% of Jaguar’s shares, according to the release.
The company could use a partner to help shuttle its lead experimental prescription product, Canalevia for treating diarrhea in dogs, through the FDA approval process. Jaguar SB-300--used to treat ulcers in horses--also looks promising. In January, it announced that in a pilot study, up to 89% of horses improved within 14 days of taking the drug.
But Jaguar’s first annual report, filed in March, showed that its research and development expenses shot up 53% year-over-year and that its net loss doubled to $16.3 million. It introduced its first product, Neonorm Calf for dairy cows, in 2014, but the report showed only $258,000 in sales for the first year.
- here’s the press release