Melt Pharmaceuticals, an affiliated company of Harrow Health, announced it has entered into definitive stock purchase agreements with accredited and institutional investors to raise proceeds of approximately $11 million in a private placement sale of its Series A preferred stock at $5 per share. Proceeds from the Series A financing will advance the development of MELT-100, Melt’s patented flagship 505(b)(2) drug candidate. Melt Pharmaceuticals will be located in Boston.
Concurrent with the financing, Greg Madison has been hired as CEO of Melt Pharmaceuticals. Most recently, Mr. Madison was CEO of Keryx Biopharmaceuticals where he led the company’s transformation from development stage to a fully integrated 200+ employee commercial organization and drove impressive revenue growth by expanding the label for the company’s lead product. Before Keryx, he was Chief Commercial Officer at specialty pharma company AMAG Pharmaceuticals and spent 12 years at Genzyme/Sanofi, ending as Vice President and General Manager of the Renal division.
“I am excited to lead the Melt Pharmaceuticals team as we embark upon our mission to bring to market innovative therapies used for conscious sedation and pain that are non-opioid and non-IV,” Mr. Madison said in a company news release. “The market opportunity for a sublingual formulation for use in conscious sedation and pain is large, as there are numerous procedures where this technology could be a potential alternative to traditional IV-based therapies.”
“Our initial focus will be in use prior to cataract surgeries, of which there are approximately 4.4 million procedures in the U.S. each year. As a non-opioid alternative, this formulation could help tackle one of the biggest issues today, with citizens, physicians, and lawmakers in the U.S. concerned about opioid addiction and overdoses. We have assembled an excellent Board of Directors and clinical advisory team to help guide us as we bring MELT-100 and the relevant data to FDA with the goal of ultimately supplying physicians and patients with a much-needed alternative, or supplement to, IV sedation,” he added.
Two weeks ago, Melt Pharmaceuticals met with FDA in a planned pre-IND meeting to discuss its clinical program for MELT-100.
“We are pleased with the dialogue with FDA and outcome of the meeting. We believe this Series A capital may be sufficient to take us to phase 3 activities for the MELT-100 program,” Mr. Madison said. “We look forward to executing the next phases of our clinical program for MELT-100, with the expectation of having our IND application for MELT-100 submitted during 2020 along with starting patient enrollment in our clinical studies thereafter.”
Following this close of the Series A financing, Melt Pharmaceuticals will be deconsolidated from Harrow Health and Harrow will hold approximately 44% of the ownership interests in Melt, consisting of 3,500,000 shares of common stock. Harrow also owns a mid-single digit percent royalty on sales of all current drug assets owned by Melt (including MELT-100).
Harrow Health CEO, Mark L. Baum, added, “This marks the third time we’ve successfully taken Harrow Health drug formulations, know-how and other IP, founded a new company, hired an experienced and focused management team, and brought in third party capital to fund the development of drug candidates for FDA approval. Also, at $5 per share, the value of Harrow’s ownership stake in Melt is greater in value than what we retained after the Series A financings of either Eton or Surface, our two previous spin-outs. I am highly confident that through Greg’s leadership and execution of the MELT-100 development program, Harrow’s equity holdings and royalties in Melt could create significant value for Harrow shareholders for many years to come. With Harrow and Melt shareholders now positioned for success, we look forward to completing work on our two other drug development subsidiaries, Mayfield Pharmaceuticals and Radley Pharmaceuticals.”
Lake Street Capital Markets was the exclusive placement agent for the financing.