By Lisa Seachrist
U.S. Bioscience raised $20 million in a private sale of common stock to two institutional investors. The funds will be used to further expand and enhance development of the the West Conshohocken, Pa.-based company's products for the treatment of cancer and AIDS.
The placement comprised 2,686,728 shares of common stock sold at $7.44 per share to the health care venture capital fund Domain Partners IV L.P., and the oncology-focused venture-capital fund Proquest Investments L.P., both of Princeton, N.J.
Robert Kriebel, U.S. Bioscience's chief financial officer, said both "have access to important technology and we hope to have the opportunity to look at that technology in order to replenish our product portfolio."
The purchase of the stock also make Domain and Proquest the major stockholders in the company, with 11 percent of the outstanding shares.
"As our largest shareholders, they will have a strong incentive to support the company," Kriebel said. "And they are contractually obligated to hold the stock for a year."
In addition to the shares of stock, the investors have the option to exercise warrants for 537,346 shares of common stock over the next three years, at an exercise price of $11.17 a share. The warrant exercise price represents a 50 percent premium over the average closing price of $7.44 for the 30 days ending Jan. 26, 1999.
With this transaction, the company will have approximately $60 million in cash and marketable securities. Last year's burn rate was approximately $10 million.
"We are a company that is growing our revenue and our financial situation is now quite ample," Kriebel told BioWorld Today."
U.S. Bioscience co-promotes Ethyol with Alza Corp., of Menlo Park, Calif. That drug is a cytoprotective agent approved for use in reducing the cumulative renal toxicity associated with repeated treatment with the chemotherapy drug cisplatin. The companies filed a supplemental application for the drug Jan. 8, as treatment designed to reduce the incidence and severity of radiation-induced dry mouth.
U.S. Bioscience's stock (AMEX:UBS) closed Thursday at $8.50, down $0.062. n
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