Fourteen months and numerous postponements after first registering for an initial public offering (IPO), Progenitor Inc., a gene discovery and functional genomics company, completed financing Thursday, pricing 2.75 million units at $7 for gross proceeds of $19.25 million.
The units, each consisting of a common share and warrant for another share, split immediately and will trade separately. Progenitor's shares (NASDAQ:PGEN) debuted at $5.625 and ended the day at $5.062, down $0.563. The warrants (NASDAQ:PGENW) opened at $1.50 and closed down $0.25 to $1.25. Over the next five years, holders of the warrants can purchase a Progenitor share at 150 percent of the unit price, or $10.50.
Accomplished with completion of the IPO was Progenitor's acquisition of Mercator Genetics Inc., a privately held Menlo Park, Calif., disease gene discovery company. In 1996 Mercator found a gene for hereditary hemochromatosis and is conducting searches for genes linked to asthma, schizophrenia and cancer.
The Mercator takeover, when it was disclosed in February 1997 was valued at $30 million. Mercator's shareholders will receive $22 million worth of Progenitor common stock. The number of shares is based on the common stock price after the units split into shares and warrants. Progenitor also agreed to assume about $8 million in Mercator liabilities.
Progenitor's research has focused on discovery of genes associated with development of blood and immune system cells, blood vessels and bone.
The company, a subsidiary of Interneuron Pharmaceuticals Inc., of Lexington, Mass., filed for an IPO in June 1996, postponed it in August that year and revived it in March 1997. The offering was completed after three price cuts and the addition of warrants to go along with the shares. (See BioWorld Today, Aug. 7, 1997, p. 1.) — Charles Craig