An underwriters syndicate of Hemosol Inc.’s bought deal exercised their option to purchase 1.12 million units, bringing the total raised in Hemosol’s public offering to about C$22 million.
In total, underwriters agreed to purchase 4.9 million units at a price of C$4.50 (US$2.83) each. Each unit includes one common share plus a purchase warrant for one-half of one share, in which each purchase warrant is exercisable into one common share at a price of C$5.50 for a period of one year. The warrants are subject to redemption at nominal consideration six months after closing if the share price is greater than $8 for 20 consecutive trading days.
Wednesday, the company said it had entered into the agreement with the syndicate to purchase 3.35 million units at the $4.50-a-unit price, plus the 1.12 million-unit option.
The company said it will use the C$22 million (US$13.8 million) to fund ongoing clinical trials and for general working capital purposes.
Company officials could not be reached for comment.
Earlier this week, Mississauga, Ontario-based Hemosol received FDA clearance to begin Phase II trials for its lead product, Hemolink (hemoglobin raffimer), as a treatment for chemotherapy-induced anemia. The trial, expected to begin in June, will evaluate the safety and tolerability of Hemolink, an oxygen therapeutic designed to improve oxygen delivery throughout the circulatory system, in 50 patients with lung or ovarian cancer.
But the week before, Health Canada did not approve an application to market Hemosol’s replacement product for donor blood. Hemosol stock (NASDAQ:HMSL) fell $1.07 on the news, or about 28.6 percent, closing at $2.67.
Hemosol’s stock fell 23 cents Thursday to close at $2.92.
Hemosol said it continues to pursue approval in the U.S., UK and Europe for Hemosol as a blood replacement product. Recently launched clinical trials, designed to meet U.S. and UK regulatory approval requirements, remain on schedule to be completed in the second quarter, with results to be available and reported in the third quarter.
Hemosol is negotiating certain amendments to its C$35 million senior credit facility as a result of the extensions of the time lines for Hemolink’s regulatory approvals. The closing of the offering is conditional upon the company reaching agreement with the senior lenders as to the appropriate amendments to the senior credit facility. The offering is expected to close on or about April 17.