Acusphere, Inc. (ACUS) recently signed a definitive agreement with Cephalon, Inc. (CEPH) whereby Acusphere raised $20M in cash ($5M upfront and $15M in a senior secured convertible loan). In return for their money, Cephalon has licensed AI-525, a preclinical injectable celecoxib for post-op pain and the right to potentially license Imagify, a billion-dollar product for the detection of coronary artery disease.

We are very pleased with the deal, especially in this environment. We regard it as a testament to the potential of Imagify. With the cash position now secure, all eyes turn to the FDA’s cardio-renal advisory panel meeting in December 2008. A positive review at that time should send the shares significantly higher.

We also note that should Cephalon decide to license Imagify, Acusphere was able to maintain a significant portion of the economics. The deal entitles Acusphere to a sizable approval milestone of $40M and royalties of 20% on territory sales of the drug. With the $20 million cash in hand now, along with the $4.1 million at the end of the third quarter, we now expect that Acusphere has enough cash to fund operations into the second quarter 2009.

Read the full analyst report on ACUS

“ACUS” Free Stock Analysis: Buy? Sell? Hold?
“CEPH” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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