Fred Eshelman's Furiex reportedly looking for buyer after drug test success
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Morrisville, N.C. — Philanthropist and life science founder of two companies Fred Eshelman may be looking to cash out of his second firm - Furiex - after the four-year-old firm hit it big on Wall Street with a new irritable bowel treatment.
Citing unnamed "people familiar with the matter," Bloomberg news reported Thursday that Furiex (Nasdaq: FURX), which is based in Morrisville, is looking for a buyer with help from Bank of America.
The report comes with Furiex stock having soared earlier this month when Furiex successful trial results for a new irritable bowel treatment drug called eluxadoline.
Now that the medicine has met targets developed in conjunction with U.S. and European regulators, management believes there is less risk for buyers and has begun contacting other drugmakers to gauge their interest in a deal, said two of the people, who asked not to be named because the company’s plans are private.
Eshelman is chairman of the Furiex board and also owns 27.5 percent of the firm's stock. The philanthropist, who has given millions to UNC-Chapel Hill, founded Wilmington-based PPD. That firm is now privately held. It spun out Furiex in 2010 before going private.
According to Furiex, Eshelman loaned the company $15 million at an interest rate of 9 percent. It is an interest-only payment loan for 12 months.
The proposed drug met key goals in two late-stage clinical trials, results that boosted the stock price of the Morrisville drug developer 129 percent on Feb. 4.
Furiex said the top-line results for the compound eluxadoline met efficacy and safety targets for treating diarrhea-predominant irritable bowel syndrome, or IBS-d. The trial design and the study endpoints for eluxadoline were agreed upon by both the U.S. Food and Drug Administration as well as the European Medicines Agency.
Furiex stock, which had closed Monday at $45.97, reached as high as $121.87 before settling down at $105.54 in mid-morning trading. Furiex finished the trading day at $105.69.
The company plans to submit eluxadoline for regulatory approval in the second quarter.
Eshelman has estimated then that annual sales of the drug would be $750 million to $1 billion.
The company’s stock rose 1.1 percent at the close in New York to $98.50 on Thursday, giving it a market value of about $1 billion. The day before the clinical trial results were released, Furiex had a market value of about $478 million.
Tony Plohoros, a spokesman for Furiex at 6 Degrees, declined to comment. John Yiannacopoulos, a spokesman for Bank of America, didn’t respond to a request for comment.
This is the second time Furiex has tried to sell itself, according to two of the people familiar with the matter. The company unsuccessfully ran an auction process last year, they said.
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