Three companies with a few years of cash and strongcorporate partnerships are offering to sell stock while themarket is still receptive.
Regeneron Pharmaceuticals Inc., of Tarrytown, N.Y.,registered to sell 3 million shares that would raise $44.64million at the current price. GeneMedicine Inc., of TheWoodlands, Texas, registered to sell 3 million shares,which would bring in $27.2 million. AndCytoTherapeutics Inc., of Providence, R.I., is trying todirectly sell 1.5 million shares to raise about $14.8million.
Regeneron's stock price recovered from last year's drop,which resulted from the failure of the company's ciliaryneurotrophic factor. The stock (NASDAQ:REGN), aslow as $3 in the past year, closed Monday at $14.88,down 13 cents. Regeneron announced its registration afterthe market closed Friday.
The company on June 30, 1995, reported having $50.2million in cash and 19.4 million shares outstanding.Regeneron, and Thousand Oaks, Calif.-based AmgenInc., are planning a Phase III trial of brain-derivedneurotrophic factor for amyotrophic lateral sclerosis, andare in Phase I with neurotrophin-3 for peripheralneuropathies.
Bringing on P. Roy Vagelos, formerly chairman and CEOof Merck & Co. of Whitehouse Station, N.J. in January aschairman of Regeneron helped in the company'sturnaround in the eyes of investors. At a shareholdersmeeting last summer, he disclosed three research areasthat eventually are expected to pad the company'spipeline (See BioWorld Today, July 11, 1995, p. 2.)
GeneMedicine currently has about $21 million in cashand 8.9 million shares outstanding. In July,GeneMedicine entered into a potential $100 millioncollaboration with Bermuda-based Corange InternationalLtd. GeneMedicine already received $4 million of the $20million equity investment Corange is scheduled to make,and has the first $1.3 million quarterly research paymentin an arrangement in which Corange could make researchpayments of $25 million over five years. Thecollaboration involves GeneMedicine's approach withnon-viral gene therapies for cancer indications. (SeeBioWorld Today, July 19, 1995, p. 1.)
GeneMedicine spokeswoman Angela Goodwin said thecompany has money in the bank, but decided the timingwas right for an offering. "Right now is a good time inbiotech," she said. "We want to take advantage of theupswing in the market. The window was open, and timewas right for the company."
GeneMedicine's stock (NASDAQ:GMED) closedMonday at $9.06, down 69 cents.
CytoTherapeutics currently has about $25 million in cashand about 12.8 million shares outstanding. It is offeringshares exclusively to institutional investors whoseminimum investment would have to be for 50,000 shares.
Daniel Geffken, CytoTherapeutics' chief financial officer,said the company is offering only to institutions becauseit's not in a position now to do a road show.
"We're looking to get a little bit of money in here fairlyquickly," Geffken said. "We're not sure how long theopportunity will last," he said, referring to the favorablemarket conditions for biotechnology companies.
Last April, CytoTherapeutics raised $10.4 million in a50,000-unit offering that also was geared only towardinstitutional investors. The company earlier that monthsigned a potential $40 million deal with Sweden-basedAstra AB for the development of CereCRIB, which isbased on CytoTherapeutics' cellular replacement therapyfor immunoisolatory biocapsule.
CytoTherapeutics' stock (NASDAQ:CTII) closedMonday at $9.88, up 38 cents. n
-- Jim Shrine
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