By Karen Young
Aradigm Corp. completed a $48.4 million Series A convertible preferred stock financing, bringing the total raised to $105 million in the past four months.
Aradigm sold 2,001,236 shares at $24.20 per share. The share price was based on an average of the three days prior to the closing of the financing, said Aradigm President and CEO Richard Thompson.
¿We are better financed now than we¿ve ever been in the history of the company,¿ Thompson said.
Noting that this financing was completed in a ¿selective¿ market, Thompson said it reflects the success Aradigm has had with its technical program, as well as with its partner on an insulin program, Novo Nordisk A/S, of Copenhagen, Denmark.
Each share of preferred stock is convertible into four shares of common stock. Aradigm said the conversion rate is fixed and not subject to any adjustments other than for stock splits, stock dividends or other similar events. The preferred stock will convert into common stock when one of two things happens: when the company completes an underwritten public offering of at least $25 million or when the stock rises to $10.59 or more per share for 20 consecutive trading days.
After this financing, Hayward, Calif.-based Aradigm has 37.5 million shares outstanding.
The company also issued warrants to the investors to purchase 5.2 million shares of common stock at an exercise price of $6.97 per share.
Aradigm¿s common stock (NASDAQ:ARDM) rose 6 cents Thursday to close at $5.61.
The financing was provided by a group of investors led by New Enterprise Associates, of Baltimore, and including Camden Partners Inc., of Baltimore; Castle Creek Partners, of Los Angeles; and Domain Public Equity Partners LP, of Princeton, N.J.
SG Cowen Securities Corp, of New York, served as placement agent for the transaction.
¿This enables us to handle all our current planned projects and several undisclosed programs, all using the AERx pulmonary drug delivery system,¿ Thompson said.
AERx is a technology platform that converts large or small molecules into fine-particle aerosols and deposits them deep into the lungs to allow for drug delivery without needles.
The money also will be used for expansion of manufacturing capacity.
Aradigm will soon announce the conclusion of Phase IIb trials for its pain management program for GlaxoSmithKline plc, of London, Thompson said.
It recently announced the completion of Phase IIb trials with the AERx insulin diabetes management system, partnered with Novo Nordisk. Phase III trials are scheduled to begin early next year, Thompson said.
Most of the remainder of the money Aradigm raised recently came from investments from Novo Nordisk related to their partnership. In August, Aradigm raised $14.6 million in a private placement. (See BioWorld Today, Nov. 21, 2001; Oct. 26, 2001; and Aug. 24, 2001.)