Advanced Tissue Sciences Inc. completed a $40 million financingThursday that the company hopes will help with the launch of its firstproducts and the development of new candidates.
The stock of the La Jolla, Calif., company was trading at $10.25when it registered for the 3-million-share offering. The shares sold at$13.25, bringing in gross proceeds of $39.75 million. The net toAdvanced Tissue was about $37.3 million.
"We're pleased to complete the deal at a 30 percent premium overthe price when we announced the offering [Feb. 23, 1996]," saidMarie Burke, Advanced Tissue's director, corporatecommunications. "We generated a lot of interest from institutions thatweren't previously in the stock. We got a nice mix of large and smallinstitutions."
New York-based firms Goldman, Sachs & Co. and Morgan Stanley& Co. Inc. managed the offering. They have an option to purchase anadditional 450,000 shares to cover overallotments.
The stock (NASDAQ:ATIS) lost $1.06 Thursday to close at $12.81in trading of 2.8 million shares.
The company recently gained access to an equity line of $50 millionthat it can draw on over the next two years. Completion of the publicoffering makes it unlikely that the line is anything more than aninsurance mechanism in the near term.
Advanced Tissue, poised to file premarket approval (PMA)applications for its lead products, now has about $50 million in cash.Shares outstanding are 36.9 million.
The company plans to use the money to fund scale-up ofmanufacturing for Dermagraft products, to put in place sales andmarketing infrastructure, and to continue development of Dermagraftand a engineered cartilage product in preclinical studies.
Dermagraft-TC, an engineered dermal tissue, showed in pivotalstudies that it performed as well or better than cadaver skin inpreparing a wound bed for autografting. It was better than cadaverskin in the secondary endpoints of ease of removal, amount ofexcision at removal, bleeding at removal and overall satisfaction withthe temporary covering.
Advanced Tissue plans to file a PMA for Dermagraft-TC by the endof June 1996 as a treatment for burns. The company plans to marketthe product itself.
Burke said a sales force of six to 10 effectively could target the 80major centers where most burn patients are treated.
The company's second product, Dermagraft, is in pivotal studies as atreatment for diabetic foot ulcers. Pending successful completion ofthose studies, Advanced Tissue looks to file a PMA by the end of theyear. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.