NABI, using low interest rates to strengthen its financial position,privately placed $70 million principal amount of 6.5 percentconvertible subordinated notes due 2003.
The notes will be convertible to common stock after April 8, 1996, at$14 per share, a 120 percent premium to the share price at the time ofthe deal. The financing, announced late Wednesday, should carry theBoca Raton, Fla., company for two years, said Alfred Fernandez, thecompany's senior vice president and chief financial officer.
NABI (formerly called North American Biologicals Inc.) paid down$30 million in debt and will pay off another $18 million over the nextmonth, Fernandez said Thursday. "We'll eliminate all bank debtwithin 45 days while retaining a $20 million line of credit.
"This gives us an inexpensive source of financing, strengthens ourbalance sheet and gives us low-cost capital to finance our operationsfor at least two years," Fernandez said. "It was an outstandingtransaction for us and the market was very receptive to it."
NABI initially proposed a $60 million deal but had orders for nearly$200 million of the bonds, Fernandez said. The deal then wasincreased to $70 million. Another $10.5 million in notes will bepurchased by underwriters Raymond James & Associates, of NewYork, and Robertson Stephens & Co., of San Francisco, he said.
NABI said it will take a charge of $1 million in the first quarterrelated to the early extinguishment of the bank debt.
The company, which has about 35 million shares outstanding, wouldadd another 5.75 million shares if all $80.5 million in notes wereconverted.
NABI's stock (NASDAQ:NABI) closed Thursday at $11.63, up 38cents per share.
North American, which primarily was a plasma supplier, merged lastyear with Univax Biologics Inc., which developed plasma-derivedantibody-based drugs. The combined company has twoimmunotherapeutic products on the market: H-BIG, a hepatitis Bimmunoglobulin, and WinRho, a polyclonal antibody for preventionof Rh isoimmunization in pregnant women and for treatment ofimmune thrombocytopenic purpura (ITP).
NABI is preparing to begin a Phase IV study of WinRho to treat ITPsecondary to lupus, Fernandez said. The company has 12 products inits pipeline.
Lead among those is HIVIG, an immunoglobulin in Phase III studiesto prevent HIV transmission from expectant mothers. Patientenrollment recently was completed in a phase II study ofHyperGam+CF, a polyclonal antibody designed to prevent and treatlung infections in cystic fibrosis patients. StaphGam, a polyclonalantibody designed to prevent Staphylococcus aureus infections inhospital patients, is in Phase II follow-on studies.
Three more products are scheduled to enter the clinic this year,Fernandez said. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.