People afflicted with AIDS/HIV may soon benefit from a unique fund-raising tactic recently used by Shaman Pharmaceuticals Inc. The South San Francisco-based biotech company raised $7.2 million in a private offering by committing a 3.6% donation from future sales of its SP-303 Provir drug to charities that help people with AIDS/HIV.
Paul Allen, Redmond, Wash.-based Microsoft Corp. co-founder, is the lead investor in the offering, investing around $3.6 million through his Vulcan Vultures, Seattle. Other investors that put in around $1 million each include Brown Simpson Asset Management, New York, a money manager to wealthy individuals; and the Odyssey Fund at Rockefeller & Co., also New York.
Susan Pierson, a spokeswoman for Mr. Allen, said he invests a fair amount in biotechnology. He decided to put money into Shaman "because it fits his strategy of investing in companies that work on products with promise. The fact that the company is contributing to AIDS is a wonderful bonus of investing in the company," she said.
SP-303 Provir, which is currently in a Phase III clinical trial for approval from the FDA, is used to treat AIDS patients who suffer from chronic diarrhea, one of the side effects of the disease.
Shaman said it will donate the percentage of future SP-303 Provir sales into the Shaman HIV Trust Fund. A third-party advisory committee will be established to divide the proceeds among organizations that work with AIDS/HIV patients to help them live better lives.
One investor, who preferred not to be named, called the plan a "virtual donation," noting that there is nothing to be lost and everything to be gained by promising to donate a portion of the proceeds in advance of the drug's approval.