VIMRx Pharmaceuticals Inc. is significantly increasing its cashposition with the calling of outstanding warrants that were issued inprevious offerings.
The Stamford, Conn., company, which ended 1995 with about $2.2million, could bring in as much as $50 million by mid-June throughthe exercisement of Class A and B warrants. VIMRx said Wednesdayit is calling for redemption of 13.8 million Class B warrants, each ofwhich can be exercised for one share of stock for $2.25. That wouldbring in $31.1 million.
Earlier this month VIMRx called the nearly 14 million Class Awarrants, which can be exercised at $1.50 apiece for a total of $21million. Many of those already have been exercised, as the companynow has about $12 million in cash.
VIMRx stock (NASDAQ:VMRX) closed Thursday at $4.28, up 19cents, suggesting nearly all of the warrants will be exercised. Thatwould mean a nice cash position for a company currently spendingabout $500,000 per month. VimRx, however, will have about 48million shares outstanding after the warrants are converted to stock.
The company's lead program in development is VIMRxyn, or asynthetic version of hypericin, an herbal medicine derived from theflowering bush, St. John's wort. The compound is being tested in a24-patient Phase I/II trial in Thailand for HIV. The compound alsocould have applications in malignant glioma, hepatitis C and as anagent to clear viruses from donated blood, said Dick Dunning, whorecently was named president and CEO at VIMRx.
The company expanded its pipeline by licensing RILON technologyfrom Ribonetics GmbH, of Gottingen, Germany. Compounds in thatprogram are based on catalytic oligonucleotides, which cut specificmessenger RNA to prevent production of specific proteins. Thatprogram is similar in many ways to ribozyme and antisensetechnologies.
"It will be very useful for research purposes in drug targetvalidation," said Frank O'Connell, chief financial officer of VIMRx.
"This [RILON] program can generate revenue within the next fewmonths," Dunning said. "It's just a matter of synthesizing thecompounds."
Dunning said VIMRx expects the RILON program to providelicensing and partnership opportunities in target validation in the nearterm, even though its utility as a generator of therapeutic compoundsstill is at an early stage. n
-- Jim Shrine
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