Avanir Pharmaceuticals Inc., an Aliso Viejo drug maker, said it is raising $40 million in a sale of shares to investors.
The company said it is going to use the money to complete its clinical trial for its Zenvia drug candidate for treating involuntary emotional expression disorder.
Involuntary emotional expression disorder is marked by uncontrollable laughing or crying.
ProQuest Investments of San Diego and Princeton, N.J., is leading the investment, which is being done as a private investment in public equity, or a PIPE deal.
Clarus Ventures, which has offices in San Francisco and Boston, Palo Alto-based Vivo Ventures and OrbiMed Advisors of New York also are joining the deal, which is expected to close around April 4.
Avanir expects the proceeds of the offering to be about $37.9 million.
The company said it expects results of the new Zenvia trial, which involves a new formulation, in the second half of 2009.
The drug maker plans to send a complete response to the Food and Drug Administration in the first half of 2010.
Regulators had sent an approvable letter for Zenvia in 2006 and raised safety concerns about the drug.
