Corvas International Inc. said it has cash to fund operations for thenext three years following a private placement that raised $15 millionthrough the sale of 3 million units, which consisted of one share andone warrant.
The units, sold for $5 each, include a warrant to buy another commonshare at $6. The warrants, which can be exercised by the holders anytime during the next six years, also have a call provision in which thecompany can redeem them for stock.
Corvas officials said the first call would occur when the company'sstock hit $12. At that point, holders of the warrants either couldpurchase shares for $6 each or swap the warrants for shares based onthe market price.
If all warrants are exercised for the purchase of shares, Corvas, ofSan Diego, will raise another $18 million for a total of $33 million.The private placement's lead investor was InternationalBiotechnology Trust, which is managed by Rothschild AssetManagement Ltd., of London.
The $15 million financing _ plus $4 million in recent milestonepayments from corporate partner, Schering-Plough Corp., ofMadison, N.J. _ gives Corvas a total of $27 million in cash.
John Crawford, Corvas' chief financial officer, said $27 million,combined with another $5 million in anticipated milestone paymentsover the next three years, gives the company enough cash reserves tocover operations into 1999.
Corvas' alliance with Schering-Plough focuses on an oral thrombininhibitor, which is an anti-blood clotting drug, to treat cardiovasculardisorders.
The company also has a collaboration with Pfizer Inc., of New York,for development of a neutrophil inhibitory factor for stroke.
Corvas' stock (NASDAQ:CVAS) closed Monday at $4.75, up 87cents. _ Charles Craig
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