A Medical Device Daily
Response Genetics (RGI; Los Angeles) has priced its initial public offering of 3 million shares at $7 a share, with the shares launched for trading yesterday on the NASDAQ Capital Market under the symbol RGDX.
RGI also granted the underwriters a 45-day over-allotment option to purchase another 450,000 shares of common stock.
Founded in 1999, RGI develops pharmacogenomic cancer diagnostics based on patented technologies that enable extraction and analysis of information from genes derived from tumor samples stored as formalin-fixed and paraffin embedded specimens. It says it currently generates revenue primarily from the sales of its pharmacogenomic testing of clinical trial specimens to the pharma industry.
Among the licenses and strategic collaborations it reports are: with GlaxoSmithKline Biologicals , the vaccine division of GlaxoSmithKline ; Roche Molecular Systems , in commercial assay development; Taiho Pharmaceutical , with molecular-based tumor analyses using RGI-1 technology; Applied Biosystems, enabling the purchase of assay testing kits built around standard DNA sequences; with the University of Southern California , providing it with a worldwide, exclusive right to use RGI-1 in human and veterinary diagnostic laboratory services; collaboration with Shanghai BioChip , to offer testing services within China using its RGI-1 RNA extraction technology; and Affymetrix, to use its GeneChip microarrays to provide pharmacogenomic testing services to RGI clients.
Concerning this last agreement, RGI says that it relies on use of Affymetrix microarrays to build the underlying pharmacogenomics data of its databases and to provide its pharmacogenomic testing services. “If Affymetrix is unable or unwilling to supply us with the products and licenses, we may need to obtain alternative technologies,” the Securities and Exchange Commission statement says.
Among some of the other risks listed in its SEC filing, the company emphasizes its dependence on these relationships. And it says that as an early-stage company, “we have limited experience in establishing and maintaining strategic relationships with healthcare industry participants.”
Through Dec. 31, the company had an accumulated deficit of $15.26 million and a stockholders’ deficit of $5,502,368. As of March 31, its accumulated deficit and stockholders’ deficit were $16,025,226 and $6,527,822, respectively.
Maxim Group acted as lead underwriter and representative of the underwriters of the offering, and Caris & Company acted as co-manager.
In other financing activity:
• Biomaterials developer and tissue processing company CryoLife (Atlanta) reported exercising its right to convert its 6% convertible preferred stock into common stock on June 25.
The preferred stock contains provisions that allow the company to convert its preferred stock into common stock if the common stock closes above $12.06 a share for any 20 trading days out of a consecutive 30-trading-day period. It said that this condition was satisfied at the close of trading on the New York Stock Exchange on June 4.
Each share of $50 convertible preferred stock is convertible into 6.2189 shares of company common stock, based on a conversion price of $8.04 a share. If any fractional shares of the CryoLife common stock result from a conversion, the company will make a cash payment equal to the value of the fractional shares of common stock.
The conversion will take place June 25 at 5 p.m. EDT. Following, the preferred stock will cease trading and will be delisted from the New York Stock Exchange.
The company also will issue 69,054 shares of common stock, with a value of $833,000 at $12.06 a share, to the preferred shareholders as a dividend for the aggregate dividends on the preferred shares that the company is obligated to pay through April 1, 2008. Upon conversion, the company anticipates taking a non-cash charge to earnings related to the derivative recorded for the dividend payment.
CryoLife’s BioGlue Surgical Adhesive is FDA-approved as an adjunct to sutures and staples for use in adult patients in open surgical repair of large vessels. BioGlue is also CE-marked and approved in Canada and Australia for use in soft tissue repair. The Company also distributes the CryoLife-O’Brien stentless porcine heart valve and the SG Model 100 vascular graft which are CE-marked.
• QLT (Vancouver, British Columbia) reported board authorization of the repurchase of up to $50 million of its common shares over the next 12 months on the NASDAQ and the Toronto Stock Exchange, pending required approvals.
Bob Butchofsky, president/CEO of QLT, said that the company “continues to have positive cash flow from its marketed products and believes in its long-term growth prospects. We expect to retain the capability of pursuing our goals to build, strengthen and grow the company through both internal drug development and external in-licensing or acquisition[s] ... .”
During the preceding 12-month period ended June 1, QLT purchased for cancellation an 13,428,200 common shares at an average of $7.96 a share through both a normal course issuer bid and a modified “Dutch Auction.” As of June 1, there were about 75.4 million common shares of QLT.
QLT develops products in the fields of ophthalmology and dermatology, including two photodynamic therapies: Visudyne and Eligard.