By Lisa Seachrist
Radiopharmaceutical specialist International Isotopes Inc. has completed a two-part equity financing that spawned $19.48 million in gross proceeds.
The Denton, Texas-based firm, founded in 1995, is using the funds to ramp up operations, as a supplier of finished radiopharmaceuticals, radiochemicals, radioisotopes and brachytherapy devices used in diagnosis and treatment of disease.
"We've finished building a 153,000-square-foot manufacturing facility, and have all of our licensing approved and our equipment in place," said Ira Lon Morgan, chairman of International Isotopes. "We are able to start manufacturing. We expect our accounts receivable to be $10 million and we need the [cash position] to support that."
The private placement consisted of 1,041,758 units of common stock and warrants raising $9.48 million. The units consisted of a share of common stock priced at $9.10, and a three-year warrant redeemable at $10 per share.
The second part of the financing consisted of $10 million of non-voting, redeemable, convertible, preferred stock funded at $5 million now and $5 million in six months, with 410,000 warrants to purchase shares of common stock. The preferred stock has a 5 percent coupon, and is convertible into common stock at an initial conversion price of $11.86. The warrants may be redeemed any time before May 20, 2002 for a price of $11.86 per share.
Investors in this financing included two private investment funds and the officers, directors and investors from the company's December 1998 private placement that raised $10 million.
International Isotopes manufactures radioisotopes for use in nuclear medicine, industry and research. The company also produces finished radiopharmaceutical products on a joint-venture or contract basis, and is working on joint-venture partnerships with radiopharmaceutical and specialty companies. The company has negotiated letters of intent for joint ventures with several medical and pharmaceutical companies.
"We've got 201 clients, and are dealing with 30 major pharmaceutical companies," Morgan said.
Morgan noted that a major portion of the radioisotope and radiochemical business in the U.S. is in diagnostics, a billion-dollar industry growing by 10 percent to 12 percent per year. Therapeutics is a $400 million dollar business, growing by nearly 60 percent per year.
Morgan said the company, with its manufacturing facility completed, has "invested about $44 million so far."
International Isotopes' stock (NASDAQ: INIS) closed Thursday at $9.75, up $0.50.