Alteon Inc. entered into a stock purchase agreement to sell 4.45 million shares of common stock to a group of institutional investors to raise net proceeds of $18.6 million.
The shares are being sold at $4.25 per share, priced at a slight discount to Alteon’s volume-weighted moving average over 20 days, said Kenneth Moch, president and CEO of Alteon.
After the financing, Alteon, of Ramsey, N.J., will have 31.8 million shares outstanding and a cash position of about $30 million, said Susan Pietropaolo, director of corporate communications and investor relations.
“With this money, we intend to look at what is in our library of compounds and determine what to bring forward,” Pietropaolo said.
Primarily, it will continue development of ALT-711 and other protein-glucose complexes called advanced glycosylation end-products (A.G.E.) cross-link breakers. Alteon has a library of novel classes of compounds targeting the A.G.E. pathway, including in addition to cross-link breakers formation inhibitors and glucose-lowering agents. With these, Alteon is developing drugs to reverse or slow down diseases of aging.
ALT-711 is in two Phase IIb trials for systolic hypertension, including one focused on systolic hypertension with left ventricular hypertrophy. These trials are expected to be completed by year-end. ALT-711 also is in Phase I trials in end-stage renal disease patients undergoing peritoneal dialysis. Results from the Phase I trial for safety and pharmacokinetic activity will be evaluated in the first half of this year.
Alteon has ALT-744, a topical A.G.E. cross-link breaker, under confidential evaluation with another company for skin aging. The company also has pimagedine, an animal health compound, in development for neuropathy in cats.
The institutional investors include funds managed by Fiduciary Trust Company International, of New York; funds managed by Merlin BioMed Group LLC, of New York; SDS Merchant Fund LP, of Greenwich, Conn.; Oracle Investment Management Inc., of Greenwich; Scout Capital, of New York; MPM BioEquities Capital LLC, of Cambridge, Mass.; and Domain Public Equity Partners, of Princeton, N.J.
Alteon’s stock (AMEX:ALT) fell 18 cents on Monday to close at $5.41.