NaPro BioTherapeutics Inc. raised $16 million in a private placement, money the company plans to use for a variety of purposes as it waits for an FDA response to its abbreviated new drug application for paclitaxel.
TL Ventures, of Santa Monica, Calif., was the sole investor in the placement, buying $8 million of common stock issued at $9 per share and $8 million face value of five-year, 4 percent debentures convertible into common stock at $15 per share. The implied blended price for the transaction is $11.25 per share.
“The pricing was pretty good,” said Gordon Link, chief financial officer of NaPro BioTherapeutics, of Boulder, Colo.
NaPro’s stock (NASDAQ:NPRO) fell 29 cents Thursday to close at $9.81.
After the placement with no shares converted, the company had 29.6 million shares outstanding. At the end of the third quarter, NaPro had $15 million in cash. Link said the company spent about $5 million in the fourth quarter and added that NaPro’s fourth-quarter earnings won’t be released until the end of March.
“Since we’re waiting for approval, the money ought to take us until we’re cash-flow positive,” Link said, adding that while the company has given no guidance on the pending application, the company expects a decision “very soon.”
Link said NaPro had hoped to have an FDA decision by the end of 2001, but that didn’t happen.
“If we see substantial appreciation of the stock post-approval, we would consider doing another financing,” Link said, noting that it probably would be along the lines of a secondary offering with a major bank.
In addition to paclitaxel, Link said that while it is too early to provide many details, NaPro has a genomics program which is investigating possible treatments for Huntington’s disease. NaPro licensed the technology for the genomics division from the University of Delaware and Thomas Jefferson University in November 2000. NaPro’s genomics operations are housed at the Delaware Biotechnology Institute in Newark, Del.
The money will help the company in several ways, he said.
For example, NaPro has manufacturing responsibilities for its partner, Abbott Laboratories, of Abbott Park, Ill., manufacturing which costs NaPro money. More cash on hand gives NaPro manufacturing freedom.
“It will allow us to be more liberal in our production of product without having to wait for the cash to turn before we make more,” Link said.
Also, NaPro is in discussions with potential partners on the genomics side of its business, and the funding strengthens the company’s position in these negotiations, Link said.
Furthermore, Link said, the money gives NaPro “guaranteed survival” in the event of an unanticipated delay from the FDA regarding the ANDA. The money also can help out with any future financings by giving NaPro a stronger balance sheet with which to go into negotiations.