Developer of injectable osteoarthritis treatment postpones $75M IPO, raises $4M in debt instead

Palo Alto, CA's Carbylan Therapeutics is developing a Phase III injectable combination therapy for knee osteoarthritis to compete with Sanofi's ($SNY) offering, but in a setback, its planned $75 million IPO was postponed.

Instead, the company raised $4 million in debt, according to a March 5 SEC filing, raising its total financing haul to $9 million in debt and $6 million in equity (out of an offered $13.2M) since 2013.

Renaissance Capital says stiff competition is a factor, but Carbylan believes its Hydros-TA is superior to Sanofi's Synvisc-One because the candidate contains the corticosteroid triamcinolone acetonide for short-term pain relief and a hyaluronic acid viscosupplement for long-term relief.

"Although not statistically significant, Hydros-TA demonstrated a numerically higher pain relief at all time points after injection when compared with Synvisc-One and the percentage of subjects who responded favorably to the product as measured by the OMERACT-OARSI responder rate was higher in the Hydros and Hydros-TA groups when compared to Synvisc-One," Carbylan says on its website.

OMERACT-OARSI is a set of responder criteria developed by the Osteoarthritis Research Society International.

Developed by Sanofi's Genzyme biotechnology unit, Synvisc-One provides up to 6 months of pain relief after a single injection but generally takes one month to have an effect, according to the product website. Like Hydros-TA, it is an intra-articular (IA) injectable, meaning it is delivered into the joint.

Hydros-TA is based on Carbylan's hydrogel technology. Hydrogels are hydrophilic (water loving), so they absorb water very well, making them good candidates for use in drug delivery. The candidate's corticosteroids are incorporated into the hydrogel and are "not readily cleared from the joint immediately following IA injection, which may allow for better retention in the joint and better protection of the cartilage surface from direct exposure to the steroid crystals," the company says on its website.

In addition, Carbylan says the formulation does not contain animal proteins that can be a source of side effects and adverse response.

Flexion Therapeutics is also developing an IA injectable steroid for osteoarthritis pain. Its stock is up about since 50% debuting in June. But Carbylan doesn't seem to be in favor among investors.

- read the SEC filing | here are more filings about the company's financing
- here's Renaissance Capital's take

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