By Karen Pihl-Carey
Genome Therapeutics Corp. raised $44.7 million in net proceeds as part of a shelf registration. The public offering involved 1.5 million shares of company stock sold through a series of transactions at a weighted average price of $31.01.
The shares were sold through Tucker Anthony Cleary Gull Inc., of Boston, from June 21 through July 7. The company's stock (NASDAQ:GENE) closed Monday at $28.125, up $1.875.
"This more than doubles our cash resources," said Philip Holberton, the company's chief financial officer. "And what it does is it really allows us as a company to move ahead and keep an eye on the strategic plan."
Genome Therapeutics registered in March for a public offering of 3 million shares to raise $103.5 million, but later canceled the offering and converted it to a shelf registration due to market volatility. (See BioWorld Today, March 17, 2000, p. 1; and April 17, 2000, p. 1.)
The company still has another 1.5 million shares, and 450,000 shares as part of an overallotment option, that are left over on the shelf registration. Company officials are evaluating whether to pull the rest of the registration or to keep it for a future offering, Holberton said.
Waltham, Mass.-based Genome Therapeutics plans to use the proceeds to fund research and development activities in its pharmacogenomics and infectious disease programs. Proceeds also will go toward general corporate purposes, including working capital, possible acquisitions and capital expenditures.
As of Feb. 26, the company had cash, cash equivalents, marketable securities and restricted cash of $35.9 million.
"Before we went into this offering, we always knew our cash resources were strong enough to last us up to two years," Holberton said. "So adding $44 million to the base certainly carries us further than that."
With pharmacogenomics, the company intends to form alliances with pharmaceutical and biotechnology companies to use its technology platform for detecting genetic variations that influence drug responses. And with its infectious disease program, it plans to identify and validate compounds internally based on its genomics research. Genome Therapeutics is concentrating mainly on human diseases believed to have a significant genetic component and infectious diseases caused by pathogens, including bacteria and fungi.
In June, Genome Therapeutics entered into a contract with Schering-Plough Corp., of Madison, N.J., to provide DNA sequencing information in support of gene discovery projects. The companies have ongoing research alliances to identify new treatments for asthma, fungal infections and drug-resistant organisms.
And earlier in June, the company secured rights to obtain worldwide exclusive access to technology for detecting single nucleotide polymorphisms from Northeastern University. The technology has the potential to increase the utility of mass spectrometry-based assays for genetic association studies, genotyping and diagnostics.
With its 1.5 million offering, Genome Therapeutics now has about 22.2 million shares outstanding.