Advanced Tissue Sciences Inc. entered an agreement Wednesdaygiving it access to an equity line of $50 million that it can draw overtwo years at its discretion.
The Palladin Group L.P., a New York money management firm,guaranteed the obligations of the investment group that provided theequity line.
Advanced Tissue, of La Jolla, Calif., can obtain up to $15 million atany one time from the equity line. The company would sell stock at a5 percent discount to an average trading price in return for any drawnfunds.
Access to the money strengthens the company's position and gives itflexibility as it continues development of its skin-replacementproducts and considers forming alliances for the products, said MariaBurke, director, corporate communications, for Advanced Tissue.
As part of the deal Advanced Tissue issued the investment group awarrant for 750,000 shares of stock exercisable at $10.50 per share.The company's stock (NASDAQ:ATIS) closed unchangedWednesday at $10.88.
Advanced Tissue currently has about 33.8 million shares outstanding.The company, with a burn rate of about $6 million per month, has inthe neighborhood of $18 million in cash.
The company said it plans to file a premarket approval (PMA)application in the first half of this year for Dermagraft-TC, anengineered human dermal tissue being developed for burns. Thecompany hopes to file a PMA by the end of the year for Dermagraft,a skin covering for treatment of diabetic foot ulcers. Both have beengranted expedited review. _ Jim Shrine
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