By Mary Welch
Genzyme Molecular Oncology is looking to raise about $72.75 million by selling 3 million shares of stock at an assumed price of $24.25, the price on Wednesday.
The Cambridge, Mass.-based company intends to use the money to fund research, preclinical and clinical development programs and to repay $5.1 million worth of existing loans.
In addition, there will be an overallotment option on another 450,000 shares. SG Cowen Securities Corp., PaineWebber Inc. and Chase H&Q, all of New York, are underwriting the offering. If the 450,000-share overallotment option is fully exercised, the company estimates it would net $78.1 million, assuming the $24.25 price. After the offering, there will be 17.8 million shares outstanding.
Genzyme Molecular Oncology¿s stock (NASDAQ:GZMO) closed Thursday at $21.50, down $2.75.
The company is developing a new generation of cancer therapeutics. Its product pipeline includes an antigen-specific vaccine in a Phase I/II trial for melanoma, and a cell therapy vaccine in a Phase I/II trial for breast cancer. In addition, five more cancer vaccine trials are expected to start this year. One will be an in vivo Phase I/II antigen-specific vaccine trial for melanoma, two will be Phase I cell therapy vaccine trials for kidney cancer, and two will be Phase I cell therapy vaccine trials for melanoma.
At the heart of the company¿s functional genomics platform is its Serial Analysis of Gene Expression (SAGE) technology. SAGE is used to identify genes involved in cancer and to understand their role in the disease process. SAGE also is licensed out to other companies as a revenue source.
An operating division of Genzyme Corp., also of Cambridge, the company reported $4.6 million in revenues for 1999, with a net loss of $28.8 million, or $2.25 per share. As of Dec. 31, it had $3.6 million in cash. However, it has access to $30 million in an equity line of credit from Genzyme General. Genzyme Molecular ended the year with 13.4 million shares outstanding.