By Lisa Seachrist
WASHINGTON — Genzyme Transgenics Corp. raised $20 million in a private placement of 20,000 shares of preferred stock with three undisclosed institutional investors.
"We are very pleased with this deal," said Patricia Dimond, director of corporate communications and investor relations for the Framingham, Mass.-based company. "This deal is good for both the company and the shareholders."
"This equity financing will allow us to complete our pivotal trial with human recombinant antithrombin III (ATIII) and market this first transgenic biopharmaceutical in 2000, pending FDA approval," the company's chairman, James Geraghty, said in a written statement.
Under terms of the placement, Genzyme Transgenics issued $20 million worth of Series A convertible preferred stock, along with warrants to purchase 400,000 shares. Dimond noted the shares were sold with a zero dividend and were not sold at a discount.
The shares are convertible during the first nine months at a premium price of $14.55 per share in order to encourage retention of the stock. After nine months, the conversion price will be based on market conditions but will not exceed $14.55 per share. The shares must be converted within three years.
The 400,000 warrants for common stock can be purchased for $15.16 per share, and the company can call the warrants when the stock reaches $21.22 per share.
Genzyme Transgenics' stock (NASDAQ:GZTC) closed Thursday at $11.687, down $0.187.
ATIII, the company's lead product, is set to enter a Phase III pivotal trial in coronary bypass grafts in the imminent future, Dimond noted.
A blood plasma protein, ATIII helps regulate blood clotting. ATIII deficiency is associated with liver diseases, disseminated intravascular coagulation, septicemia, shock, burns, multiple trauma, and organ transplant and other surgical procedures.
Genzyme Transgenics produces ATIII in transgenic goats, which are bred by inserting human DNA into animal cells so that the targeted protein is secreted in the milk of female offspring.
In addition to the ATIII pivotal trial, the company intends to use the funds raised in the private placement to expand its goat farm in Charlton, Mass., increase marketing activities related to ATIII, further develop its in-house programs and potentially fund acquisitions.
Genzyme Corp. of Cambridge, Mass., owns 43 percent of the outstanding stock in Genzyme Transgenics. *