Creative BioMolecules Inc., which was near the end of its cash, saidWednesday that it received signed purchase agreements frominvestors for an $11.2 million private placement.
The Hopkinton, Mass., company is selling about 1.13 million unitsconsisting of one share of preferred stock. Each preferred share isconvertible into five common shares and a warrant to purchase oneshare of common stock.
The unit price of about $9.94, based on a recent 10-day average ofthe company's stock (NASDAQ:CBMI), gives investors the optionto convert to five common shares at a price of about $1.99 apiece.The warrant can be converted to a common share for $2.385.Creative BioMolecules' stock closed up 13 cents Wednesday at$1.88 per share.
The shares were placed primarily with existing institutional andventure investors.
The cash infusion, together with a recent manufacturing contract andcompany cutbacks, is expected to take Creative BioMoleculesthrough mid-1996, "at which time we will have clinical data in ourtwo most advanced programs," Stephanie Marrus, the company'svice president, corporate development, told BioWorld.
The lead programs involve OP-1, an osteogenic protein, beingdeveloped for orthopedic reconstruction indications by partnerStryker Corp., of Kalamazoo, Mich.; and a study being run byCreative BioMolecules in regeneration of tooth dentin. Each productis classified as a device.
Stryker committed $8.6 million over two years to CreativeBioMolecules in a research-and-supply agreement related todevelopment of OP-1. Stryker is in a pivotal trial with OP-1 in non-union fractures, which are severe fractures that do not knit backtogether. Marrus said there has been some delay due to the difficultyof finding patients for the indication.
There is a nine-month follow-up period to the OP-1 trial. Companyofficials won't disclose where Stryker is in enrollment.
Creative BioMolecules completed a pilot trial in the regeneration oftooth dentin last spring, and hopes to go back in the clinic in thatindication in the first half of 1995, Marrus said.
The company has a preclinical pipeline that includes OP-1 andplatelet-derived growth factors for indications such as osteoporosis,periodontal tissue repair and gastrointestinal disorders. But the focuscurrently is on the products in the clinic rather than those in thepipeline, Marrus said.
In September, Creative BioMolecules said it was cutting staff byabout 20 percent to save money. It laid off 34 of 195 employees, andnow has 160 on staff, Marrus said. Later that month the companysigned a three-year $18 million manufacturing contract with BiogenInc., of Cambridge, Mass.
The Biogen deal and $3 million annual savings from restructuringshould cut the company's burn rate in half. Creative BioMoleculesrecently has reported net losses of about $4.5 million per quarter.
Marrus said she couldn't discuss financial data for the 1994 fiscalyear, which ended Sept. 30, because it has not been released. Theyear-end numbers are expected to be out this morning.
Based on historical spending, the company would have about $16million in cash and investments after collecting from the $11.2million offering, which was done without an underwriter. CreativeBioMolecules has about 19.5 million shares outstanding. If all sharesof preferred stock are converted, it would have about 25.1 millionoutstanding. n
-- Jim Shrine
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