Rigel Pharmaceuticals Inc. raised $31.5 million privately and expects to find itself in the clinic this year.
Rigel, of South San Francisco, entered an agreement to privately place 7 million shares at $4.50 per share with Robertson Stephens Inc., of San Francisco, acting as placement agent. The company said it expects to net $29.4 million from the sale.
“This is primarily operating cash for the company,” said Jim Welch, Rigel’s chief financial officer. “Basically, it’s providing money to take our first products into the clinic.”
At the end of the third quarter, Rigel had $37 million in cash and cash equivalents, Welch told BioWorld Today. Following the sale, the company will have 44 million shares outstanding. The share price of $4.50 was a negotiated figure, Welch said.
Rigel sold the shares pursuant to a shelf registration statement filed last month, in which it would be able to issue various types of securities from time to time, up to an aggregate of $50 million.
Historically, Rigel has burned through $4 million to $5 million per quarter, but things are changing in South San Francisco.
“As we’ve grown up, it’s gotten bigger,” Welch said, adding that Rigel’s burn rate should continue to grow because “the clinic is not cheap.”
Rigel has 10 product-development programs in the areas of asthma/allergy, autoimmunity, transplant rejection, rheumatoid arthritis, inflammatory bowel disease, chronic bronchitis, cancerous tumor growth and hepatitis C. Of those, Welch said Rigel’s first clinical product should come from its mast cell program and the company intends to file the investigational new drug application for the indication of allergic rhinitis. The company expects to file a total of three investigational new drug applications in the next 24 months or so.
Rigel has collaborations with Pfizer Inc., of New York; Johnson & Johnson Pharmaceutical Research & Development LLC, a unit of Johnson & Johnson, of New Brunswick, N.J.; and Novartis Pharma AG, of Basel, Switzerland, among others. In August, Rigel and Novartis expanded their original $100 million deal, signed in June 1999, giving Rigel a $4 million up-front payment and raising the deal’s potential. (See BioWorld Today, Aug.1, 2001.)
Rigel’s stock (NASDAQ:RIGL) fell 15 cents Thursday to close at $4.55.