Canadian firm Cangene Corp. is boosting its cash position by C$35.4 million (US$30.9 million) through a bought-deal agreement to sell about 4.4 million shares priced at C$8.10 each.
The shares are being sold to a syndicate of underwriters led by Toronto-based GMP Securities LP, and including TD Securities Inc., Scotia Capital Inc. and Sprott Securities Ltd., all of Toronto. That syndicate also agreed to purchase 5.6 million shares from Cangene's shareholders Apotex Holdings Inc., of Ontario, and the Sherman Foundation, though Cangene will not realize proceeds from that transaction.
The company could not comment on the financing, but said in a press release that funds would be used for working capital, general corporate purposes and to repay a portion of its outstanding indebtedness.
Headquartered in Winnipeg, Manitoba, Cangene has a pipeline of marketed and investigational products focused on recombinant biopharmaceuticals and drugs aimed at infectious diseases and biodefense.
The company made headlines earlier this year when two of its biodefense drugs won substantial contracts from the U.S. Department of Health and Human Services. In May, Cangene reported a five-year $362 million contract to supply 200,000 doses of its botulinum toxin immune globulin (heptavalent botulism antitoxin), and two months later was awarded a $143 million contract for its anthrax product, anthrax immune globulin (AIG). Full payments of those contracts are contingent upon the drugs gaining FDA approval. (See BioWorld Today, June 2, 2006, and July 31, 2006.)
Cangene anticipates delivering doses of its botulinum toxin immune globulin starting in 2007. That product is a hyperimmune drug derived from horse plasma and aims at treating exposure to the bacteria and/or toxin responsible for botulism, a condition characterized by muscle weakness or paralysis.
AIG, also a hyperimmune, is an antibody derived from donors immunized with the anthrax vaccine and is designed to treat inhalation anthrax, an acute infectious disease caused by inhaling spores of Bacillus anthracis.
Cangene is manufacturing both products at its Winnipeg facility.
Beyond its work in biodefense, the company is awaiting FDA approval on its recombinant human growth hormone product, Accretropin, for short stature in children with growth hormone deficiency and in girls with Turner syndrome, an X chromosome-linked genetic disorder that results in short stature and infertility.
Cangene also is waiting for Canadian approval of Leucotropin, a recombinant human granulocyte-macrophage colony-stimulating factor in cancer.
The company markets four products - WinRHO SDF for immune thrombocytopenic purpura, HepaGam B for post-exposure prophylaxis against hepatitis B, vaccinia immune globulin for adverse reactions to the smallpox vaccine and VariZIG for complications from varicella.
Cangene reported a net income of C$13.1 million, or C20 cents per share, for its fiscal year ending July 31. At that time, the company had about C$37.7 million in cash and accounts receivable.