Digene Corp. raised gross proceeds of $15 million in a direct private placement equity transaction under which Digene sold 588,235 shares of its common stock to Acqua Wellington Private Placement Fund Ltd. and Acqua Wellington Opportunity I Ltd.
The per-share price was $25.50. Digene has about 17 million shares outstanding.
Digene, of Gaithersburg, Md., develops, manufactures and markets DNA and RNA testing systems for the screening, monitoring and diagnosis of human diseases, primarily focusing on women’s health, including cervical cancer and sexually transmitted diseases.
Digene’s stock (NASDAQ:DIGE) fell 36 cents Thursday to close at $24.64.
“We’re pleased with Wellington as an investor, and we think the capital strengthens our balance sheet and makes us even healthier,” Charles Fleishman, president of Digene, told BioWorld Today. “This reinforces our ability to meet investor expectations for market penetration.”
Fleishman said he expects the company to meet its “net income break even” point at the end of its fiscal year in June.
The company said it will use the proceeds to build its sales and marketing programs and fund research and development, as well as to provide working capital. It also said it may use some of the proceeds to acquire or invest in other businesses.
“We are growing our marketing and sales capability in the U.S. as our Hybrid Capture HPV [human papillomavirus] test achieves greater market penetration,” Fleishman said.
The product, launched in 1999, has experienced sales growth of about 50 percent per year, with fiscal year 2001 sales of about $20 million, out of total corporate sales of $34 million. Digene said that HPV is found in 99 percent of cervical cancers. The test is being marketed in some European and South American countries as a primary cervical screen in conjunction with the Pap smear.
The company also has diagnostic tests for other sexually transmitted diseases, including chlamydia and gonorrhea, and tests for blood viruses.
In addition to diagnostic testing, Digene focuses on genomics research. It said in January that it had launched in the United States its Hybrid Capture ExpressArray Kit, a research assay for gene expression analysis on microarrays, expanding the Hybrid Capture technology into the global DNA microarray life science research market. It also further positions the company in molecular diagnostics for women’s health.