Magainin Pharmaceuticals Inc. announced Tuesday that it hasmade a private placement of about 1.1 million shares of itscommon stock with a number of institutional investors. At aprice of $14 per share, the placement should bring thePlymouth Meeting, Pa., company gross proceeds of $15.3million.
The PIPE (private investment in public entity) offering will becomplete upon the registration of the new shares by theSecurities and Exchange Commission, after which the shareswill be freely tradable.
Michael Dougherty, Magainin's senior vice president and chieffinancial officer, told BioWorld that the share price wasnegotiated several days before the deal was announced andwas not based on a set discount to the market. The placementwas arranged by Hambrecht & Quist Inc. and S.G. Warburg &Co. Inc.
Proceeds from the financing will be used for clinical trials,payments for contract manufacturing of the company's leadcompound, MSI-78, and research and development. Thecompany recently completed enrollment for its Phase IIb/IIItrial of MSI-78 and is expected to report results from the trialin May, Dougherty said. MSI-78, which is being developed forthe treatment of dermatologic infections, entered Phase IIb/IIItesting in mid-1993.
Magainin currently has about 13.2 million shares outstanding.As of Feb. 28 the company had approximately $37 million incash on hand, and Dougherty said Magainin was expecting aburn rate of about $1.5 million per month in the upcomingmonths.
The company's last financing, also a PIPE offering, was lastOctober, when it raised more than $19 million through the saleof 2.2 million shares of common stock at $8.75 per share.
Magainin's stock (NASDAQ:MAGN) closed at $14.75 a share onTuesday, up 38 cents.
-- Karl A. Thiel Business Editor
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