By Karen Pihl-Carey
On the heels of two major acquisitions, SignalGene Inc. priced a public offering of common shares to raise C$19.375 million (US$13.12 million).
The Montreal-based company intends to sell 12.5 million shares of stock at C$1.55 per share, a slight discount to the market price. If the underwriters exercise in full the overallotment option, the company will raise a total of C$22.281 million (US$15.1 million). Underwriters are led by Toronto-based BMO Nesbitt Burns Inc., and include National Bank Financial Inc. and Yorkton Securities Inc., also of Toronto.
"We've just completed or neared the completion of two acquisitions that allow us to put together a pipeline from gene discovery through to lead compound generation," said Michael Dennis, president and CEO of SignalGene. "And the money will allow us to integrate those activities and to upgrade the sum of the technologies and drive the internal programs that we have - the obesity, osteoporosis, and breast cancer programs."
All of SignalGene's programs are in the preclinical stage.
In March, the company completed an acquisition of GeneScape Inc., of Mississauga, Ontario, for about C$12.7 million, including a C$2.7 million equity investment in GeneScape by certain shareholders. Privately held GeneScape developed technologies to identify and validate novel targets for the discovery of new therapeutic drugs. The company's STAR (subtractive transcription-based amplification of mRNA) technology permits the selective amplification and isolation of otherwise normal gene messages that are increased or decreased in cells during the course of disease or following treatment with drugs. GeneScape's MACS (macroarrays for clinical screening) technology identifies specific genes that are markers of the disease process or drug response, and its FAST (facilitated antisense sequence tags) technology allows for accelerated validation of potential drug targets by blocking specific gene activity in living cells.
Dennis said the GeneScape platform expands SignalGene's capabilities by allowing for the analysis of the smallest changes in gene expression.
Acquisition Brought In Silico Drug Design Ability
In early May, SignalGene announced its plans to acquire Nanodesign Inc. (NDI), a computer-aided drug design company located in Guelph, Ontario. The transaction, valued at C$15 million, is expected to close next week, Dennis said. Founded in 1997, NDI holds licenses to technology, called Evolutionary Molecular Design (EMD), for the in silico design of drug candidate molecules. The EMD platform integrates information about the structure and activity of known pharmacologically active compounds with therapeutic criteria, such as efficacy profiles and bioavailability, to generate novel compound structures. The technology has allowed NDI to discover two novel classes of estrogen receptor modulators with the potential to treat breast cancer and other estrogen-related disorders.
"These two acquisitions with very innovative technologies, along with this financing, will now put us in the position to create a stream of new lead compounds," Dennis told BioWorld Today.
As of March 31, SignalGene had about C$10.8 million (US$7.3 million) in cash and cash equivalents. Dennis estimates the company now has about C$9 million, not including proceeds from the public offering, which represents about 24 months of burn money for SignalGene.
With the public offering, the company will have 114.5 million outstanding shares. Its stock trades on the Toronto Stock Exchange (TSE:SGI) and closed Thursday at C$1.56, up a penny.
Aside from programs in obesity, osteoporosis and breast cancer, SignalGene also has research-stage programs in Alzheimer's disease and psoriasis.
It recently signed a collaboration with the National Research Council of Canada's Institute for Biological Sciences to identify novel targets to develop drugs to treat central nervous system disorders, such as Alzheimer's and Parkinson's diseases.
And in December, the company entered into a collaboration with the Office of Technology Transfer of McGill University aimed at understanding the role of nuclear receptors in complex genetic diseases and at discovering and validating drug targets.