Neurobiological Technologies Inc. priced a public offering of 21.8 million shares at $2.75 per share, generating gross proceeds of $60 million.
Although the offering price was barely below NTI's Monday closing price of $2.79, it's a far cry from the Emeryville, Calif.-based company's 52-week high of $22.54. NTI's shares (NASDAQ:NTII) have fallen steadily since late June and continued to slide Tuesday, closing down 17 cents at $2.62.
Merriman Curhan Ford & Co. served as the sole book-running manager for the offering, with Dawson James Securities Inc. acting as co-manager. The deal is expected to close Nov. 2 and will bring NTI estimated net proceeds of $56 million, or up to $65 million if the underwriters exercise their overallotment option to an additional 3.3 million shares.
The money comes none too soon for NTI, which reported cash and equivalents of about $8.9 million on June 30 and operating expenses of $9.3 million during the preceding quarter. In September, the company completed a $6 million debt and equity bridge financing and conducted a 1-for-7 reverse stock split, but its independent accounting firm still raised concerns about its ability to operate, and Nasdaq said it failed to comply with market value requirements for listing.
The new financing should help address those concerns. Proceeds will support two ongoing Phase III trials with Viprinex (ancrod), a defibrinogenating thrombin-like enzyme for stroke derived from the venom of the Malayan pit viper. The drug is a reprofusion agent like Genentech Inc.'s Activase (tissue-plasminogen activator, t-PA), but is designed to be administered up to six hours after a stroke instead of within three hours. (See BioWorld Today, Jan. 19, 2007.)
NTI also receives royalties from Merz Pharmaceuticals GmbH and its marketing partners on sales of Namenda/Ebixa (memantine) for the treatment of Alzheimer's disease, and it stands to receive royalties from Celtic Pharma Holdings LP on sales of the Phase III drug Xerecept (corticorelin acetate injection) if it gains approval for tumor-related brain swelling.
In other financing news:
• Ambrilia Biopharma Inc., of Montreal, closed its previously announced offering of about 13 million units of stock and warrants priced at C$1.25 per unit, generating gross proceeds of C$16.3 million (US$16.9 million). Underwriters Canaccord Capital Corp., Dundee Securities Corp., and Loewen, Ondaatje, McCutcheon Ltd. have the option to purchase an additional 1.9 million units to cover any overallotments. Proceeds will support ongoing Phase III trials of octreotide (reformulated Sandostatin LAR) and preclinical development of goserelin (reformulated Zoladex), as well as lead optimization of HIV integrase inhibitors.
• DUSA Pharmaceuticals Inc., of Wilmington, Mass., raised $11 million through the private placement of about 4.6 million common shares at $2.40 per share, a discount to the company's Monday closing price of $2.71. DUSA's stock (NASDAQ:DUSA) fell 33 cents, or 12 percent, on Tuesday to close at $2.38. DUSA also issued warrants to purchase an additional 1.1 million common shares at $2.85 per share before 2013. Proceeds will support Levulan (aminolevulinic acid HCl) photodynamic therapy, which is approved in some countries for precancerous actinic keratoses and is being studied in other indications. Rodman & Renshaw LLC served as the placement agent for the financing, in which Deerfield Management and Greenway Capital invested.
• ImmuneWorks LLC, of Indianapolis, raised $300,000 from the Indiana Seed Fund I managed by BioCrossroads. Proceeds will support manufacturing and preparations for an investigational new drug application filing in 2008 with a drug candidate incorporating purified Type V collagen for idiopathic pulmonary fibrosis. (See BioWorld Today, Aug. 8, 2007.)
• Living Cell Technologies Ltd., of Melbourne, Australia, is raising A$6.4 million (US$5.8 million) through the private placement of 17.7 million ordinary shares at A36 cents per share, a discount to the company's Monday closing price of A42 cents per share. The financing is in addition to a potential $8 million private placement announced earlier this month. Proceeds of both financings will support Russian and New Zealand clinical trials of DiabeCell, the company's Type I diabetes product, and will fund ongoing expansion of the pig breeding herd to meet clinical requirements.
• Regenetech Inc., of Houston, raised $2.5 million in private equity financing from individual investors coordinated by Outrider Investors LLC and brokerage firm Royal Securities Co. Proceeds will support Regenetech's cellXpansion technology, which expands hematopoietic stem cell populations for use in therapy, banking and clinical trials. The company also plans to launch a subsidiary focused on bone healing in veterinary orthopedics. (See BioWorld Today, May 22, 2007.)