Zogenix Strategy Unfolds as it Unveils Plans for Next Drug-and-Device Combo

this patient population, partly because it’s hard to keep them on a strict schedule for taking their meds.

While it took awhile for the startup’s founders to initially settle on a business plan, the advantages of the company’s strategy should become increasingly evident as Zogenix introduces each new device-and-device combo, Hawley says. After making what Hawley calls “a very significant investment” in developing the Zogenix DosePro needle-free delivery system (The U.K. manufacturing plant accounting for the biggest part), he says it should be relatively easy to double the factory’s capacity from two million to four million devices, and again to eight million units.

Of course, each new cycle of the company’s drug-and-device development will require separate FDA review and clearance. Still, it is a little easier to win FDA approval for reformulations of existing drugs. And because each drug-and-device combo represents a unique product, Zogenix expects to benefit from patent protection on its unique formulation, and to maintain a strong position in the market, even if the drug’s original patent has expired.

Zogenix and Durect plan to change the formulation of risperidone “fairly significantly,” and Hawley says the new version will be highly viscous. As a result, the drug development partners still must amass pharmacokinetic data and complete other clinical studies to validate their approach.

Although Zogenix became a public company eight months ago, its IPO raised a total of $56 million, which was only about two-thirds of its initial $90 million goal. Covering the shortfall required Zogenix to arrange what Hawley called a $30 million “royalty financing” with Cowen Healthcare Royalty Partners II. The financing, which closed yesterday, included 388,601 shares of Zogenix stock, which generated another $1.5 million in gross proceeds for Zogenix, and convertible warrants that can be exercised over the next 10 years for a total of 225,000 Zogenix shares. With the financing, Hawley said Zogenix was able to push out a $3.7 million repayment on its debt that was due in 2011. Still, he says, “We may not be done raising capital.”

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.