Valeritas raises $25m via reverse merger, private placement

Valeritas said today it raised $25 million through an “alternative public offering” via a reverse merger and the private placement of 5 million shares of unregistered stock at $5 per share.

Through the reverse merger, Valeritas will trade on the OTC market under the symbol “VLRX” and will continue to operate business as usual, the Bridgewater, N.J.-based company said.

“This is an extremely exciting time at Valeritas as the company very recently shifted its sales strategy to more focused, high-return on investment and profitable sales growth model.  We believe under this new sales model we will be able to successfully impact the massive Type 2 diabetes market in the U.S. with our transformative product offering, V-Go®, in a manner that creates significant value for Valeritas shareholders while minimizing future capital needs,” CEO John Timberlake said in prepared remarks.

The company makes the V-Go basal insulin delivery system for Type II diabetes, a fully disposable continuous-delivery insulin system that’s designed to function for 24 hours based on a preset rate, with on-demand dosing for meal times.

Net proceeds of $23.7 million from the round will be used to support sales and marketing as well as research and development and further commercialization of the V-Go. Extra funds will be used to back continued development of next-gen products and general corporate purposes.

Investors in the round included CRG L.P. and Montrose Capital Partners.

“We would like to thank both existing and new investors for their vote of confidence and support. The APO affords Valeritas a prime opportunity to continue its commercialization activities and significantly advance its important work. We intend to continue making a meaningful and positive difference on the daily lives of the millions living with Type 2 diabetes by increasing our presence throughout the U.S. as well as expanding our product offerings,” Timberlake said in a press release.

Along with the placement, Valeritas said it agreed to file a registration statement with the SEC to cover the resale of shares of stock issued in the reverse merger and placement.

In March, nearly a year after tabling a proposed initial public offering, Valeritas formally withdrew the planned flotation in a regulatory filing.

“The market conditions have been such that the offering of registrant’s common stock will not be consummated, and there have been no public offering activities by the registrant for at least the last several months,” Bridgewater, N.J.-based Valeritas said in the filing.

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