Australian bio-nanotech firm pSivida Ltd. is padding its bank account with an $18 million registered direct offering of American Depositary Shares and warrants to purchase ADSs.
The firm agreed to sell about 14.4 million units priced at $1.25 apiece, each unit consisting of one ADS, which represents 10 ordinary shares, plus one warrant to purchase 0.40 ADSs at an exercise price of $1.65 per ADS.
About a third of those units are being purchased by New York-based Pfizer Inc., which agreed to partner with pSivida in a April collaboration deal valued at up to $165 million to use pSivida's drug delivery technologies, including the Medidur technology, for ophthalmic applications. Pfizer's investment in the offering is about $6.5 million, and adds to the 22.5 million ordinary shares purchased by the pharma firm at the time of the agreement. (See BioWorld Today, April 5, 2007.)
According to pSivida's prospectus, the company expects net proceeds to total $16.3 million, which will add to the $7.4 million in the bank as of March 31. Funds will be used to support general corporate purposes, including research and development activities, as well as fund general administrative costs. Cowen and Co. LLC acted as lead placement agent, while JMP Securities LLC served as co-placement.
The Perth, Australia-based firm, which also has operations in Boston and in Malvern, UK, has two marketed products, Vitrasert for AIDS-related CMV retinitis and Retisert for uveitis.
Both of those sustained-release products are sold through Bausch & Lomb, of Rochester, N.Y., which has rights to the technologies underlying both products.
A second drug delivery technology spawned late-stage product Medidur, an intravitreal insert designed to deliver corticosteroid fluocinolone acetonide for up to three years. Medidur is in Phase III trials in diabetic macular edema with partner Alimera Sciences Inc., of Atlanta.
The companies reported in April that the study had enrolled more than half of the expected 900 patients. Outside of DME, Pfizer holds rights to develop the technology for other ophthalmic indications, and is funding the cost of the joint research program.
Beyond ophthalmology, pSivida is developing BioSilicon, a modified form of silicon. The most advanced product, a brachytherapy treatment known as BrachySil, aims to deliver a therapeutic, P32, directly to solid tumors. It is in Phase II testing in pancreatic cancer.
Following the offering, pSivida will have about 710 million ordinary shares outstanding. The company's stock (NASDAQ:PSDV) fell 34 cents, or 22.4 percent, Monday to close at $1.18.
In other financings news:
• Biogen Idec Inc., of Cambridge, Mass., completed its modified "Dutch Auction" tender offer that expired last week. Biogen Idec accepted for payment 56.42 million shares of common stock at a purchase price of $53 per share, for a total share repurchase of about $3 billion. Those shares represent about 16.4 percent of the shares outstanding as of June 26. Biogen Idec also said it would borrow $1.5 billion under a loan agreement with Merrill Lynch Capital Corp. as administrative agent and Goldman Sachs Credit Partners LP as syndication agent in order to partially finance the share repurchase.
• Cytogen Corp., of Princeton, N.J., entered purchase agreements for a private placement of 5.8 million shares at 2.9 million warrants to purchase common shares at $1.74 per share. Warrants have a term of five years and an exercise price of $2.23 per share. Cytogen expects the financing to raise about $10.1 million in gross proceeds, which will be used to support the marketing of Caphosol, which was launched in March as a topical adjunct treatment of oral mucositis caused by radiation or high-dose chemotherapy. Money also will be used to advance clinical development programs, pursue additional in-licensing opportunities and for other general corporate purposes. Cytogen's stock (NASDAQ:CYTO) lost 28 cents, or 14.4 percent, to close Monday at $1.67.
• Hemispherx Biopharma Inc., of Philadelphia, said it retired all remaining debt related to convertible debentures issued in October 2003, January 2004 and July 2004. Of that debt of $4.1 million, only $1.6 million was required to be paid in new funds to retire the debentures, with the balance being covered by other cash and securities already held as collateral for the debentures. At the close of the first quarter, the company's cash and marketable securities totaled $24.6 million.
• ISTA Pharmaceuticals Inc., of Irvine, Calif., completed its $36.8 million private financing. The company placed 5.3 million shares of common stock with institutional investors priced at $7 each. Net proceeds will be used to support general corporate purposes, including the funding of its research and development programs, such as bepotastine, strong steroid, Xibrom and steroid combination product, and ecabet sodium clinical studies. Shares of ISTA (NASDAQ:ISTA) closed at $7.81 Monday, up 43 cents. (See BioWorld Today, June 28, 2007.)
• Pro-Pharmaceuticals Inc., of Newton, Mass., said the securities purchase agreement between the company and investors was terminated following the American Stock Exchange's notice that the company is not in compliance with certain listing standards. Pro-Pharmaceuticals believes that a proposed new pricing, based on the current trading price of its stock, would be excessively dilutive and is not in the best interest of its shareholders. The company is evaluating other financing alternatives. Pro-Pharmaceuticals planned last month to offer about 4.2 million shares priced at 65 cents each to raise $2.7 million. The company is developing drugs to treat cancer and liver, microbial, cardiovascular and inflammatory diseases. Shares of Pro-Pharmaceuticals (AMEX:PRW) gained 15 cents, or 42.5 percent, Monday to close at 50 cents.