By Frances Bishopp
In an insider financing, the Immune Response Corp. has raised $15.8 million in a private placement of units consisting of common stock and warrants to purchase stock of the company.
Purchasers Kevin Kimberlin, a director and co-founder of the Carlsbad, Calif.-based company, and Dennis J. Carlo, president and CEO, bought the units at a price of $7.80 per unit. The private placement consists of 2,029,719 unregistered shares plus 2,029,719 unregistered four-year warrants.
"This type of financing done by insiders is almost unprecedented," Charles Cashion, vice president of finance, told BioWorld Today. "This is a very big move for a biotech company and we think it is a vote of confidence by these people making such a substantial personal investment in the company."
The warrants, with an exercise price of $14, are callable by the company if the stock trades at $28 or greater for 45 consecutive days.
Carlo purchased 253,715 units and Kimberlin purchased 1,776,004 units.
The terms of the agreements include an initial 25 percent down payment of $3,957,952, with the remaining balance, $11,873,857, covered by a promissory note to the company, due Sept. 30, 1997.
Total Financing Could Top $44M
If the warrants are exercised, Immune would receive another $28.4 million. The total potential proceeds of the stock and warrants are $44,247,875. The shares and warrants are not transferable for one year.
Much of the newly raised money is earmarked for Immune Response's six products currently in the clinic, Cashion said.
Immune Response's lead product, Remune, for HIV infection, began Phase III clinical trials in March of 1996, Debra Altman, manager of securities compliance and investor relations, told BioWorld Today. Close on its heels is Immune's therapy for rheumatoid arthritis, which completed Phase II clinical trials in early January 1997, she added.
Besides its products in the clinic, Immune Response has four products in pre-clinical development. Immune Response has technologies in four areas: HIV, autoimmune disease, gene therapy and cancer.
As of March 31, 1997, the company had 20,288,722 shares outstanding. Immune Response currently has $55 million in cash, Altman said
Immune Response's stock (NASDAQ:IMNR) closed Monday at $7.187, down $0.250. *