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DARA BioSciences to Raise $2.8 Million Pursuant to Securities Purchase Agreement

  DARA BioSciences to Raise $2.8 Million Pursuant to Securities Purchase
  Agreement

   Funds Earmarked for Soltamox Commercial Activities, Gelclair Launch and
                               Working Capital

Business Wire

RALEIGH, N.C. -- December 31, 2012

DARA BioSciences, Inc. (Nasdaq:DARA) (the "Company" or "DARA") announced that
it entered into a definitive securities purchase agreement with certain
investors providing for the issuance of $2,800,000 of shares of Series B-3 and
Series B-4 convertible preferred stock (convertible into a combined total of
3,684,210 shares of common stock), two and one half year warrants to purchase
up to 1,842,105 shares of common stock at an exercise price of $1.05 and five
and one half year warrants to purchase up to 1,842,105 shares of common stock
at an exercise price of $1.05. None of the warrants are exercisable for six
months from the initial issuance date. The Series B-3 and Series B-4
convertible preferred stock is convertible at any time into shares of common
stock at an initial conversion price of $0.76 per share.

David J. Drutz, M.D., Chief Executive Officer, commented, "We are pleased to
have consummated this financing, which will provide additional capital for the
commercial activities related to Soltamox®, our FDA-approved treatment for
breast cancer, and for Gelclair, our FDA-cleared product for the treatment of
oral mucositis, which we expect to launch in the first quarter of 2013. Funds
will also be used for general corporate purposes. We expect that with this
additional funding we will have enough cash to effectively execute our
commercial plan and believe that this raise will alleviate our needs for
additional financing in 2013."

Ladenburg Thalmann & Co., Inc., a subsidiary of Ladenburg Thalmann Financial
Services Inc. (NYSE AMEX:LTS), acted as the exclusive placement agent for this
transaction.

The closing of the sale of the securities is expected to take place on or
about December 31, 2012, subject to satisfaction of customary closing
conditions.

The shares of Series B-3 preferred stock described above were offered pursuant
to a shelf registration statement (File No. 333-173098), which was declared
effective by the United States Securities and Exchange Commission ("SEC") on
April 19, 2011. The shares of Series B-4 preferred stock and warrants
described above have not been registered under the Securities Act of 1933 (the
“Act”), and may not be offered or sold in the United States absent
registration with the SEC or an applicable exemption from such registration
requirements. The Company has agreed to file one or more registration
statements with the SEC covering the resale of the shares of common stock
issuable upon conversion of or in connection with the Series B-4 preferred
stock and upon exercise of the warrants. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy any of the
securities described herein, nor shall there be any sale of these securities
in any state or jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such state or jurisdiction. When filed with the SEC, copies of the
prospectus supplement and the accompanying base prospectus relating to this
offering may be obtained at the SEC's website at http://www.sec.gov or by
request at Ladenburg Thalmann & Co., Inc, 4400 Biscayne Blvd., 14th Floor,
Miami, Florida 33137.

About DARA BioSciences, Inc.

DARA is a specialty pharmaceutical company focused on the development and
commercialization of oncology treatment and supportive care products. DARA has
comprehensive commercial coverage across the national oncology market through
a series of agreements with a number of specialty pharmacy providers, leading
group purchasing organizations (GPOs), retail partners, reimbursement experts,
and an industry-leading third-party logistics provider. As part of an
integrated national network with annual sales of over $1 billion in cancer
therapeutics, DARA has significant commercial scale and capabilities. Its
distribution network consists of more than 45,000 retail pharmacies, mail
order pharmacies, and long-term care facilities. This provides DARA with
established reimbursement and logistics expertise, as well as partnering
opportunities with more than 300 sales and marketing personnel uniquely
focused on oncology and oncology support products. This comprehensive network
of partners is rare if not unique among companies in the oncology supportive
care area and provides DARA a strong foundation for product introductions into
this underserved market.

DARA increased its focus in oncology through its January 2012 acquisition of
Oncogenerix, Inc., which holds the exclusive U.S. marketing rights to
Soltamox^®, a novel oral liquid formulation of tamoxifen citrate, which is
widely used in the treatment and prevention of breast cancer. Soltamox is the
only FDA-approved oral liquid version of tamoxifen citrate and fulfills a
vital clinical need for patients who cannot tolerate existing solid tablet
formulations of this drug. DARA launched Soltamox in October 2012 to coincide
with National Breast Cancer Awareness Month. DARA has exclusive U.S. rights to
Soltamox through a license from Rosemont Pharmaceuticals, Ltd. Additionally,
in June 2012, DARA launched its first product, Bionect^®, a topical treatment
for skin irritation and burns associated with radiation therapy. DARA has
rights to market Bionect in the US oncology/radiology markets under license
from Innocutis. In September 2012, DARA entered into an exclusive agreement
with the Helsinn Group of Switzerland for U.S. commercial rights to
Gelclair^®, an FDA-cleared product for the treatment of oral mucositis. DARA
plans to launch Gelclair in the first quarter of 2013.

Prior to acquiring Oncogenerix, DARA was focused on the development of a
cancer-support therapeutic compound, KRN5500, for the treatment of neuropathic
pain in patients with cancer. This product is an excellent fit with DARA’s
strategic oncology focus, has successfully completed a Phase 2a clinical
trial, and has been designated a Fast Track Drug by the FDA. DARA is working
with the National Cancer Institute (NCI) to design an additional clinical
trial under joint DARA-NCI auspices while continuing further Phase 2
development. DARA has submitted an Orphan Drug Application to the FDA for
KRN5500.

In addition to its oncology products, DARA’s pipeline includes DB959, a novel,
non-TZD dual delta/gamma PPAR agonist for the treatment of type 2 diabetes and
dyslipidemia. DARA has completed Phase 1 testing of DB959 and is presently
pursuing opportunities to out-license this product.

For more information please visit our web site at www.darabio.com.

Safe Harbor Statement

All statements in this news release that are not historical are
forward-looking statements within the meaning of the Securities Exchange Act
of 1934, as amended. Such forward-looking statements are subject to factors
that could cause actual results to differ materially for DARA from those
projected. Those factors include risks and uncertainties relating to DARA's
ability to timely commercialize and generate revenues or profits from
Bionect^®, Soltamox^®, Gelclair^® or other products given that DARA only
recently hired its initial sales force and DARA's lack of history as a
revenue-generating company, FDA and other regulatory risks relating to DARA's
ability to market Bionect^®, Soltamox^®, Gelclair^® or other products in the
U.S. or elsewhere, DARA's ability to develop and bring new products to market
as anticipated, DARA's current cash position and its need to raise additional
capital in order to be able to continue to fund its operations, the current
regulatory environment in which DARA develops and sells its products, the
market acceptance of those products, dependence on partners, successful
performance under collaborative and other commercial agreements, competition,
the strength of DARA's intellectual property and the intellectual property of
others, the potential delisting of DARA's common stock from the NASDAQ Capital
Market, risks and uncertainties relating to DARA's ability to successfully
integrate Oncogenerix and other risk factors identified in the documents DARA
has filed, or will file, with the Securities and Exchange Commission ("SEC").
Copies of DARA's filings with the SEC may be obtained from the SEC Internet
site at http://www.sec.gov. DARA expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in DARA's
expectations with regard thereto or any change in events, conditions, or
circumstances on which any such statements are based. DARA BioSciences and the
DARA logo are trademarks of DARA BioSciences, Inc.

Contact:

Contact for DARA BioSciences, Inc.:
The Del Mar Consulting Group, Inc.
Robert B. Prag, 858-794-9500
President
bprag@delmarconsulting.com
or
Alex Partners, LLC
Scott Wilfong, 425-242-0891
President
scott@alexpartnersllc.com
 
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