By Karen Pihl-Carey
Genset SA raised more than Euro49 million (US$46.7 million) by issuing convertible bonds exchangeable into the company's common shares.
The Paris-based genomics company also could raise more through an overallotment option, bringing the total amount raised to Euro55 million (US$52.43 million).
"This instrument allows us to raise money at a premium to our current stock price," said Pascal Brandys, chairman and CEO of Genset, in a statement, "and provides resources at a crucial time to further support our aggressive exploitation of genomic data towards the creation of multiple medically valuable assets."
Genset's stock (NASDAQ:GENXY) closed Friday at $27.375, up $2.00.
The bond issuance was structured as a zero-coupon convertible bond, and provides for no interest payments during the 42-month term. The original conversion price was set at a 17.5 percent premium to Genset's share price at the time of the pricing, the company said. It did not disclose further details, and company officials could not be reached Friday for comment.
The issuance offers flexible call provisions, allowing Genset to accelerate conversion into common stock at any time prior to maturity, as long as the share price exceeds predetermined trigger levels.
SG Cowen Securities Corp., of New York, placed the bonds.
Earlier this year, Genset completed a major gene-sequencing program with Ceres Inc., of Los Angeles, in Arabidopsis thaliana, and it entered into an agreement with Corixa Corp., of Seattle, to sequence the genome of an undisclosed organism. The company also entered into a research collaboration with the Whitehead Institute for Biomedical Research, of Cambridge, Mass., to discover and characterize genes involved in obesity and diabetes.
In March, Genset signed a collaborative research agreement with Abbott Laboratories, of Abbott Park, Ill., to discover genes associated with bipolar disorder and Type II diabetes. (See BioWorld Today, March 6, 2000, p. 1.)
Abbott and Genset also have a $42 million pharmacogenomics agreement formed in 1997 to pinpoint multiple genes and polymorphisms associated with efficacy and side effects of drugs. (See BioWorld Today, July 29, 1997, p. 1.)