By Lee Landenberger
A $12 million line of credit from a single institutional investor in Ireland has been secured by Cytogen Corp. in its fight against cancer.
Cytogen, a Princeton, N.J.-based biopharmaceutical company that develops and markets products for the diagnosis and treatment of cancer and other illnesses, may now, under certain conditions, draw up to $12 million in cash from Kingsbridge Capital in exchange for Cytogen common stock in increments over a two-year period. The draws may be taken when the shares are registered with the Securities and Exchange Commission.
At the time of any drawdown, the stock shares will be issued at a 15 percent discount to the market price. Cytogen can draw down from the credit line at will — an unusual feature of such a credit line, Angela Bitting, a Cytogen spokeswoman, told BioWorld Today.
"This deal gives the company a lot of flexibility. The company can draw down at will," Bitting said. "Normally, a company must commit to two or three segments of financing. But Cytogen can draw down between $200,000 and $1 million every 20 trading days."
There is also a no-shorting clause in the credit line, Bitting said, so that someone cannot short the Cytogen stock in order to drive it down.
Cytogen will use the credit line to focus on increasing sales of existing products, Bitting added. Cytogen products include ProstaScint, a diagnostic imaging agent for prostate cancer; Quadramet, a bone pain treatment for cancers that have spread to the bones; and OncoScint CR/OV, a diagnostic agent used in the fight against colorectal and ovarian cancer. The products are distributed around the world, either by the company or through agreements with C.R. Bard, Faulding, CIS Biointernational, and DuPont Pharmaceuticals. *