Ventrus Biosciences Announces $20M Worth of Financing

Ventrus Biosciences Inc. recently made known the prices of separate underwritten offerings of 5,800,000 shares of its common stocks. They are looking to receive about $20,000,000 from these offerings.

The company’s Chairman and CEO, Russell H. Ellison, M.D., M.Sc., tells us more through this e-interview with Lead411:

Who are your competitors and how are you different from them?

Our lead product Diltiazem cream (VEN-307) is a topical treatment for the relief of pain associated with anal fissures. Anal fissures are small tears or cuts in the skin that lines the anus. These fissures can be extremely painful particularly with defecation, can cause bleeding, and often require surgery, which itself can have unsatisfactory outcomes such as incontinence.

Diltiazem, the active ingredient in our product, is a calcium channel blocker which reduces smooth muscle tone and has been used for decades to treat hypertension and angina. With VEN-307, diltiazem works by dilating arterial blood vessels and reducing anal sphincter tone, and results in substantially reduced anal fissure pain. In both the U.S. and Europe, topical diltiazem has long been recommended as first-line treatment for anal fissures prior to prescribing surgery. Currently, it is only possible to obtain pharmacy compounded versions of diltiazem, but these versions are not ideal for a number of reasons. Concentration of the active ingredient can be highly variable between pharmacies and even within each tube, and the cost of these versions is not typically covered by Medicare or health insurance plans.

In a recent clinical study, patients treated with VEN-307, applied peri-anally three times per day, experienced a statistically significant reduction in pain associated with defecation after 4 weeks of treatment. VEN-307 was well tolerated, with minimal differences observed between active and placebo groups. If approved, VEN-307 will be the first GMP formulation of a diltiazem cream to treat pain associated with anal fissures for which there is robust clinical data and FDA approval – and it will be commercially available at pharmacies throughout the U.S. As such, we believe VEN-307 will be eligible for reimbursement under Medicare and other health insurance plans. We plan to implement a comprehensive co-pay program to greatly minimize the out of pocket costs to patients.

At present there is only one FDA-approved drug for the treatment of anal fissures: RectivT (0.4% nitroglycerin ointment) from Aptalis. While it appears to be effective at reducing anal fissure pain, the relief comes with a very difficult side effect profile, most notably moderate and severe headaches (64% of patients), and flushing, nausea and dizziness. Rectiv is also costly with a price point of $700 per 8 week course of treatment. We are also aware of limited use of Botox being injected into the anal sphincter to treat pain from anal fissures, but due to the highly invasive nature of this treatment, combined with its high, unreimbursed cost, transient incontinence, and diminished effect over time, we don’t view this as a significant competitor.

What percentage of your marketing budget is spent on the following?

Since our products are still in development, and not yet on the market, the bulk of our capital is spent on research and development, clinical trials, and general operations of the company. As we get closer to the product’s approval spending on market research, education, and marketing initiatives primarily targeted at gastroenterologists and colorectal surgeons will ramp

What marketing tactic has given you the highest ROI? What percentage ROI do you get back on this?

See answer to #2.

What do you plan to spend your new funding on? Product development?

We intend to use the net proceeds from the recent financing to continue the development of VEN-307, pre-launch and launch of VEN-307 if approved, and also for general corporate purposes. We have already begun our second, confirmatory Phase 3 study of VEN-307 for the treatment of pain associated with anal fissures, which we expect to be able to report out in the fourth quarter of 2013 with an NDA submission to follow by year end 2013.

If this is your first round of financing and you’re the CEO, how many hours did you put into working on getting your financing? Was that taking up the most of your day?

No, this was not the first round of financing for the Company. One major responsibility of the CEO is to continually keep our existing investor base, and possible future investors, apprised of the company’s potential both in the medical community and in the financial market.

If you are the CEO, what are your biggest challenges?

There are a number of challenges that development stage specialty pharmaceutical companies face, but I’d have to say the biggest challenge Ventrus will face in the coming months is the transformation from development stage to a commercial organization. Since we will most likely
market our products ourselves, we will have to expand the organization exponentially, primarily by the addition of a contract sales force, and we will have to successfully manage that growth.

How many employees do you have?

We operate as a virtual company and we currently have 7 full time employees who manage a large stable of talented consultants and contracted specialists.

When were you founded?

We were founded in 2005.

How much did you revenue increase (if any) this year over last year?

We are a pre-revenue, development stage company.

Want to read more about this recent financing? There’s more about it on this press release here.

About Christine Guinto

Christine Guinto is our part-time writer for the Lead411 Blog. She specializes in our funding news. You can contact her at christine [at] Christine Amos on Google+!