Talon gets first $11mm from new Warburg/Deerfield financing commitment

Talon Therapeutics Inc. (nanoparticle drug delivery for oncology) entered into an investment agreement under which Warburg Pincus and Deerfield Management could purchase up to $71mm of the company’s preferred stock. In the initial closing, the investors bought 110k shares of Series A-2 preferred stock at $100 per share, for proceeds to the company of $11mm. The shares are convertible to common at $0.30 each (Talon stock averaged $0.44 at the time of the sale). Warburg and Deerfield could buy an additional $60mm in Series A-3 preferred shares, which are convertible into common at $0.35 apiece. Proceeds will be put towards gaining FDA approval of Marqibo, a liposome-encapsulated form of vincristine that is in development for adult Philadelphia chromosome (Ph) negative acute lymphoblastic leukemia and adult aggressive non-Hodgkin’s lymphoma. The therapy has a PDUFA date of May 13, 2012. The current financing arrangement replaces a similar agreement signed between all of the parties in 2010. Terms of that deal called for a total investment of $100mm, of which $40mm was received at signing and another $60mm was pending. (The remaining portion of that financing has now been terminated.)