By Mary Welch
Aradigm Corp. raised $25.5 million in a private placement to fund the construction of a large-scale commercial manufacturing plant.
The company, headquartered in Hayward, Calif., sold 24 million shares of stock at $10.50 per share, and has about 14.7 million shares outstanding.
Richard Thompson, Aradigm¿s president and CEO, said the company chose the private placement as a way to raise money because it was ¿simpler and surer¿ than other methods. ¿We could get the deal done quicker and easier,¿ he said.
The money will be used to build an 18,000-square-foot plant adjacent to the company¿s clinical manufacturing site in Hayward. Although part of the plant will be occupied by the end of the year, it will not be completed for a few more years ¿ about the same time Aradigm¿s products may be ready to launch.
¿This financing is intended to pay for the manufacturing plant, not [for] any product development,¿ Thompson said. ¿That is what we have partners for.¿
The company said it has enough cash, with the financing, to last at least through 2000.
Aradigm¿s principal product development programs are based on its AERx pulmonary drug delivery system, which creates aerosols from liquid drug formulations for systemic delivery by way of the lung, or locally to the lung.
The company has two products in Phase II trials and two in Phase I trials.
In 1997, Aradigm signed a deal worth up to $40 million with London-based SmithKline Beecham plc to use AERx for a pain management system that would deliver morphine from liquid drug packets. A Phase II study of that product is expected to finish this year. (See BioWorld Today, Oct. 2, 1997, p. 1.)
Deals With Four Partners Ongoing
The second Phase II trial, for an insulin-delivery product partnered with Novo Nordisk A/S, of Bagsvaerd, Denmark, is expected to end next year. Aradigm and Novo entered a $50 million diabetes deal last year. (See BioWorld Today, June 4, 1998, p. 1.)
The company has deals with four undisclosed partners for molecules, two of which are in Phase I trials, Thompson said. ¿We¿ll announce them when we can,¿ he added.
Serving as financial advisors for Aradigm in the offering were U.S. Bancorp Piper Jaffray Inc., of Minneapolis, and Petkevich & Partners, of San Francisco. Zesiger Capital Group, of New York, increased its interest in the company with this participation. New investors included Kaufman Bros. LLC, of New York; Hambrecht & Quist Capital Management, of Boston; Delta Opportunity Fund Ltd., of New York; and Diaz & Altschul Advisors LLC, of New York.
Aradigm¿s stock (NASDAQ:ARDM) closed Monday at $8.625, up $0.187.