Capnia (CAPN) Enters $10M Stock Purchase Agreement

July 27, 2015 7:08 AM EDT
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Capnia, Inc. (NASDAQ: CAPN), focused on the development and commercialization of novel products based on its proprietary technologies for precision metering of gas flow, announced it has entered into a common stock purchase agreement with Aspire Capital Fund, LLC ("Aspire Capital"). Under the new agreement, Capnia has the right to sell up to $10 million in value of its common stock to Aspire Capital, subject to certain terms and conditions, over a two-year period. The agreement represents a strategic tool that provides Capnia with important capital to fund the development of its therapeutics pipeline.

"Our promising therapeutics pipeline is a renewed focus at Capnia and we have recently made significant advances with these programs, in particular with cluster headache where we recently entered the clinic," said Anish Bhatnagar, M.D., Chief Executive Officer of Capnia. "This financing with Aspire provides us with strategic leverage, financial flexibility, and an excellent financing alternative as it enables us to raise capital on an as-needed basis. Having this ready access to capital provides us a stronger financial position as we continue to execute, not only on the commercialization of CoSense, but on the near term value drivers in our therapeutic business."

Therapeutics Pipeline Overview

Capnia was originally founded on its innovative therapeutic technology that uses nasal, non-inhaled CO2 (nasal CO2), delivered at a low-flow rate into the nasal cavity. We believe that potential indications include alleviation of symptoms of allergies as well as trigeminally-mediated pain disorders such as cluster headache, migraine and trigeminal neuralgia (TN). Capnia has completed multiple clinical trials for the treatment of the symptoms of allergic rhinitis as well as conditions such as migraine using this technology. The use of Capnia's nasal CO2 product for the treatment of cluster headache, migraine and TN is supported by data demonstrating that CO2 may inhibit sensory nerve activation, subsequent release of neuropeptides and alleviate trigeminally-mediated pain.

Nasal CO2 for the Treatment of Cluster Headache – In January 2015, Capnia partnered with Clinvest® to develop a therapeutic product for the treatment of cluster headache. In July 2015, Capnia announced the commencement of a pilot clinical trial evaluating nasal CO2 in approximately 25 patients with episodic cluster headaches. Roger K. Cady, M.D., founder of the Headache Care Center and Chief Executive Officer of Clinvest, will serve as principal investigator for the investigator-sponsored trial. Capnia expects to report top-line data from this trial in 2016.

Nasal CO2 for the Treatment of Trigeminal Neuralgia – In December 2014, Capnia submitted an application to the U.S. Food and Drug Administration (FDA) requesting Orphan Drug Designation for nasal CO2 for the treatment of trigeminal neuralgia (TN). In March of 2015, Capnia received a response from the FDA and is continuing its discussions with the FDA regarding Orphan Drug Designation for its nasal CO2 technology in this indication. Capnia expects to initiate a pilot clinical trial evaluating nasal CO2 in TN in Fall 2015.

Nasal CO2 for the Treatment of Allergic Rhinitis (Serenz™) – To date, Capnia has conducted studies with nasal CO2 in 975 patients across six randomized, controlled clinical trials. In the clinical trials to date, nasal CO2 has shown a large effect size, an onset of effect within 30 minutes, and is well-tolerated. Capnia expects to clarify the regulatory approval pathway for allergic rhinitis in the U.S. with the FDA by the end of 2015, and subsequently, will seek to secure partnership or continue development.

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