Boston Life Sciences Inc. completed a private placement Thursdaythat grossed $24 million, twice what the company originallyexpected.
The cost of the placement came in the form of stock dilution forBoston Life, which already has about 83 million shares outstanding.This financing could add nearly 50 million more shares. Theplacement, made to institutions and individuals, was managed byNew York-based Paramount Capital Inc.
In connection with the placement the company issued 240 units, eachconsisting of 1,000 shares of Series A convertible preferred stock andwarrants to purchase 25,000 shares at a previously determineddiscount price.
Each share of Series A is convertible into about 175 shares ofcommon stock. That translates into the possible conversion into 42million shares. Using only those numbers the shares were sold forabout 57 cents each, a significant discount to the stock's currentprice. Another 6 million shares could be issued through redemptionof the warrants.
Boston Life's stock (NASDAQ:BLSI) gained 6 cents Thursday toclose at $1.44.
George Aldrige, the company's vice president, corporatedevelopment and finance, pointed out that the stock was tradingaround 50 cents to 60 cents per share a few months ago, when theplacement was initiated, and closed the year at 75 cents.
David Hillson, president and CEO of Boston Life, told BioWorldToday the better-than-expected reception to the offering was afunction of increased acceptance of the company's streamlined, orvirtual, approach, combined with its ability to identify productopportunities that quickly can be advanced without large cashexpenditures.
On Sept. 30, 1995, Boston Life had about $2 million in cash. It'sbeen spending about $1 million per quarter.
"We are convinced we can go forward aggressively, not only with ourcurrent portfolio but with other opportunities," Hillson said. "Wehave cash that will ensure us several years of very comfortablerunning room. It establishes our company as one that will quicklybecome a major player."
Boston Life, of Waltham, Mass., has various preclinical technologiesthat came from Harvard Medical School and affiliated institutions. Areverse merger with Greenwich Pharmaceuticals Inc., formerly ofFort Washington, Pa., in June 1995 brought in carbohydrate-basedtechnology. It also resulted in Boston Life's entry into the publicmarkets, the large number of shares outstanding and the decision tocontinue development of Therafectin, Greenwich's lead drug forrheumatoid arthritis that was deemed not approvable by the FDA inearly 1995.
Boston Life is planning another Phase III study of Therafectin thatmay get under way in the next month or two. The idea will be toreplicate and build upon an earlier study that showed statisticalsignificance. Other studies, however, failed to meet their endpoints.
Earlier in the pipeline Boston Life is developing a cartilage-derivedinhibitor, a natural anti-angiogenesis factor for solid tumors;axogenesis factor 1, a central nervous system growth factor; and atranscription factor that controls expression of molecules associatedwith autoimmune diseases. The company recently started a Phase Istudy of Altropane, a radioimaging agent for Parkinson's disease. n
-- Jim Shrine
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