By Matthew Willett
SangStat Inc. completed a private placement that grossed it $15 million through the sale of 1.36 million shares to institutional investors at $11 per share, a 12 percent discount to the average closing market price 10 days prior to the closing.
SangStat, of Fremont, Calif., said it will use the proceeds from the offering for working capital. The company focuses on transplantation. Early this year it completed a private placement of 1.3 million shares that raised $12.5 million. (See BioWorld Today, Jan. 10, 2001.)
SangStat CEO Jean-Jacques Bienaime said the financing ensures the company has operating capital on a ¿go-forward basis.¿
¿This financing should last us until we become cash-flow positive,¿ Bienaime told BioWorld Today. ¿We¿ve said we¿ll reach a break-even point in the fourth quarter of this year, and that¿s still our intent. Things are on track for this to happen.¿
SangStat¿s portfolio of approved products includes the antithymocyte rabbit immunoglobulin Thymoglobulin, which was approved in 1998 for treatment of renal transplant acute rejection in conjunction with concomitant immunosuppression.
The company also markets Gengraf cyclosporine capsules for prophylaxis of organ rejection in kidney, liver and heart allogeneic transplants; Celsior, launched in the U.S. in 1999 as a flush and cold storage solution for cardiac transplantation; and Lymphoglobuline, marketed outside the U.S. for treatment of aplastic anemia and graft-vs.-host disease.
SangStat¿s pipeline includes ABX-CBL, an anti-CD147 monoclonal antibody for treatment of steroid-resistant graft-vs.-host disease in development through a partnership with Abgenix Inc., of Foster City, Calif.; RDP58, a Phase I candidate for treatment of inflammatory bowl disease; and cyclosporine capsules for the prevention of organ rejection. The cyclosporine formulation is awaiting regulatory approval in the UK.
¿The funding is for general working capital,¿ Bienaime said. ¿We¿ll continue to execute our development plan for ABX-CBL and for RDP58 and complete our study of Thymoglobulin in induction therapy and myelodysplastic syndrome. We also just started a Phase I trial of RDP58 in ulcerative colitis and Crohn¿s disease, and we¿ll continue to be able to finance that development.¿
SangStat reported a first-quarter net loss of $3.6 million on revenues of $20.3 million. The total revenue in the first quarter represented a 72 percent increase over the corresponding time period in 2000. SangStat said that reflects an increase in sales of Thymoglobulin and Gengraf.
SangStat reported 19.4 million shares outstanding at the end of the first quarter and cash and cash equivalents totaling $16.4 million.
SangStat¿s shares (NASDAQ:SANG) dropped 2 cents Friday, closing at $14.