June 22, 2010 (FinancialWire) — Cadence Pharmaceuticals, Inc. (NASDAQ: CADX), a biopharmaceutical firm, said it has signed an agreement providing Cadence with an exclusive option to acquire Incline Therapeutics, Inc., a privately held specialty pharmaceutical company.  The company also said that it has closed a $30 million secured loan facility with Oxford Finance, Silicon Valley Bank and GE Financial Services, Inc. (NYSE: GE)   

Incline is developing Ionsys, an investigational product candidate intended to provide patient-controlled analgesia for adult inpatients requiring opioids following surgery.

The Ionsys system was approved by both the U.S. Food and Drug Administration and the European Medicines Agency in 2006; however, Ionsys is not currently marketed anywhere in the world.

Before this product candidate may be marketed, Incline must obtain regulatory approval from both the FDA and EMA for new patient safety features being developed into the system.

Ted Schroeder, President and CEO of Cadence, said, "We believe that this agreement provides Cadence with the opportunity to build our pipeline and strengthen our franchise in the hospital market, while effectively managing our cash."

He said the transaction is consistent with Cadence’s long-standing strategy to focus on products for use in the hospital that the firm believe have a clear clinical and regulatory path to approval.

Incline separately announced on June 21 that it has entered into an agreement to complete a $43 million Series A venture financing, which will be used primarily to fund the development of Ionsys.

Cadence will receive $500,000 of Incline Series A preferred stock, and Schroeder has been appointed as Cadence's representative on the Incline board of directors.

Upon closing of the transaction, David Socks, SVP of corporate development and strategy of Cadence, has resigned from Cadence to join Incline as president and COO.

Under the terms of the option agreement, Cadence will pay Incline a $3.5 million upfront option fee and a second $3.5 million fee upon the commencement of the second option period if Cadence has not yet exercised its option to acquire Incline.

The second option period commences on the later to occur of 12 months or the date on which Incline receives the second tranche of its Series A financing and extends until the earlier to occur of 42 months or the date on which Incline submits a supplemental New Drug Application for Ionsys to the FDA, subject to certain limitations.

Cadence may exercise its option to acquire Incline at any time during the first option period for an amount not to exceed $135 million and at any time during the second option period for an amount not to exceed $228 million plus payment of an additional amount not to exceed $57 million upon FDA approval of Ionsys.

California-based Cadence Pharmaceuticals is a biopharmaceutical company focused on in-licensing, developing and commercializing proprietary product candidates principally for use in the hospital setting. On May 4, 2010 Cadence resubmitted a New Drug Application for its investigational product candidate, Ofirmev injection for the treatment of pain and fever in adults and children.

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