By Mary Welch
Trega Biosciences Inc. raised $11 million in a private placement of 3.7 million shares of stock, with the proceeds earmarked for acquiring and developing new technologies.
¿The market, obviously, has been very volatile but we felt very comfortable with the results,¿ said Gerald Wills, the company¿s vice president of finance and chief financial officer. ¿The cold hard reality is that the market has made it more difficult to raise money now. But we attracted some good institutional investors. This gives us a broader institutional base for our stock, and allows our message to get out better.¿
The stock was priced at a 20 percent to 25 percent discount, Wills said. The sale averages about $2.97 per share. Trega¿s stock (NASDAQ:TRGA) closed Wednesday at $4.75, up 31.2 cents. Prior to the placement, the San Diego-based company had 19.5 million shares outstanding.
¿We don¿t intend this money to be used for general corporate purposes, but really for acquisition of technology,¿ Wills said. ¿When you acquire technology you have to have the cash to develop it, and that¿s really what we¿re doing here.¿
The company is seeking new technologies in combinatorial chemistry compounds and predictive modeling, he said.
Earlier this year, Trega changed its focus to its information-based products rather than in-house drug discovery programs. The company will continue only those drug discovery programs that are funded by a collaborator, Wills said.
Trega is concentrating on developing and promoting its iDiscovery system, which can span the drug discovery process, beginning with synthesizing novel compounds to providing uniquely qualified drug leads to the pharmaceutical and life sciences industries. The iDiscovery technologies are comprised of small-molecule combinatorial chemistry, high-throughput screens and predictive models that can create novel drug candidates with a greater chance of clinical success, the company said.
Part of the iDiscovery technologies include the information-rich Chem.Folio combinatorial libraries for screening against biological targets, and IDEA predictive models for the prediction and selection of compounds with essential drug-like characteristics for development.
The company has a $75 million collaborative program in the areas of diabetes, obesity and syndrome X with Novartis AG, of Basel, Switzerland. (See BioWorld Today, May 27, 1998, p. 1.)
However, its lead drug, HP 228 for post-surgical pain, is in limbo. Data from its Phase II trials showed that HP 228 statistically reduced morphine use by patients who had hip replacements.
¿We are seeking partners for this drug to fund the trials,¿ Wills said. ¿If we don¿t find a partner, we will not go forward with it.¿
Formerly known as Houghten Pharmaceuticals Inc., Trega reported 1999 revenues of $13.3 million and a net loss of $8.7 million. As of Dec. 31, the company had $6.4 million in cash.