StressGen Biotechnologies Corp., which is developing drugs basedon "cellular stress response," said Monday that it reached a writtenagreement in principle with institutional investors for a privateplacement to raise Canadian $4.5 million (U.S. $3.24 million).
The Victoria, B.C., company had revenues of about Canadian $9.6million in 1994 from the sales of biochemicals and reagents to stressprotein researchers. StressGen also is developing vaccines usingstress protein as adjuvants.
Stress proteins have two functions, said Michael Tippie, StressGen'schief financial officer and vice president, finance and corporatedevelopment. Under normal conditions they act as "molecularchaperones," directing proteins around the cell and folding themcorrectly. Under periods of stress, he said, the synthesis of stressproteins are up-regulated and perform a protective function, as wellas boosting the immune system.
The investment group is led by MDS Health Ventures Inc., ofToronto, and includes Vancouver firms BC Life Sciences LimitedPartnership and Ventures West BC Technology Investment Fund.
StressGen, traded on The Vancouver Stock Exchange, hopes toaccess a senior exchange, such as the Toronto Stock Exchange,Tippie said. He said the addition of institutional investors in theprivate placement is a way of broadening the sophistication level ofcompany investors in preparation for future financings.
The investors will buy about 5.4 million units at Canadian 83 centsapiece. Each unit consists of one common share and .7 of a warrant.Each full warrant can be exchanged for a common share at 83 centsin the first year and $1.25 in the second year.
Tippie, formerly a venture capitalist in the U.S., said it's a good timeto raise money in Canada. "I find the difference in the [financial]climate startling," he said. _ Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.