By Brady Huggett
Fibrogen Inc. completed a $56.5 million private placement of convertible preferred stock in a move that it hopes will allow it to go public on its own terms.
"We don't want to go out there in a desperate move, to go out because we have to [for money]," said Bert Lee, chief financial officer of the South San Francisco company. "We want to go out there when the market is right."
Franklin Templeton Investments, of Rancho Cordova, Calif., and American Express Financial Advisors, of New York, led the investment. Also participating were a Finnish group led by BioFund Ventures, of Helsinki; Life Science Venture Fund, of Tokyo, which led Japanese and Taiwanese investors Hotung Ventures, IBJ Investments Ltd., Orix and Asahi Life; and other undisclosed investors.
The amount of convertible preferred stock for the funding represents about 20 percent of the company and gives Fibrogen roughly $60 million in cash, cash equivalents and short-term investments. Lee said the money gives Fibrogen resources for the foreseeable future.
"It was a very large amount of money for a private placement. One of the reasons we raised this much money is so that we can have as much capital as we need to achieve our goals," he said. "We can go on for a year or two years without any problem."
Those goals are accelerating and funding development programs within the company. Fibrogen produces human collagen and human gelatin in recombinant systems, without using animal parts. Using this technology, Fibrogen plans to become a bulk product supplier for the pharmaceutical and medical devices industries as well as a developer and commercializer of injectable products, wound management products and gelatin stabilizers. Also, Lee said the company will fund and develop drugs to fight fibrosis.
Fibrogen has a collaboration with Taisho Pharmaceutical Co., of Tokyo, to discover and develop human monoclonal antibody therapeutics for renal fibrosis and chronic transplant rejection. Fibrogen began a collaboration with ZymoGenetics Inc., of Seattle, in July to jointly develop a wound repair product. Additionally, the company has over 20 active agreements with pharmaceutical and medical device manufacturers for development and feasibility testing of its recombinant human collagens or gelatins as replacement components for animal-sourced materials. (See BioWorld Today, July 27, 2000, p. 1.)
The funding not only gives Fibrogen the finances it needs, said Lee, but it also adds to the company's profile.
"I think it speaks well. There is a very strong backing and that lends credibility to what we are doing," Lee said. "We have always been very proud of our business model and we think others can see that. From our point of view, we are very pleased."