Bio-Technology General Corp. (BTG) on Monday announced theclosing of a $37.5 million placement made through Bio-Cardia Corp., anew, independent company that is essentially an off-balance sheetfinancing vehicle for BTG.
The $37.5 million was raised through the private placement of 375BTG units priced at $100,000 each. The financing was arranged by D.Blech & Co.
Each unit consisted of four shares of Bio-Cardia common stock and15,000 warrants to purchase BTG common stock (NASDAQ:BTGC) at$5.49 per share. The warrants are exercisable for five years. BTG alsoplans to register the warrants with the Securities and ExchangeCommission within nine months so they can be publicly traded.
BTG maintains a four-year option to repurchase all outstandingshares of Bio-Cardia stock at 125-200 percent of the investedamount, determined by the length of time the shares have beenoutstanding. Prior to any repurchase of Bio-Cardia stock, BTG keepsthe exclusive right to commercialize any of the products developedunder the agreement.
Leah Berkovits, BTG's manager of administration, explained that thecreation of Bio-Cardia allows BTG to fund product developmentwithout affecting the company's cash reserves.
Bio-Cardia was formed in April 1993 when BTG's original offeringmemorandum was circulated. The financing closed Dec. 31.
Bio-Cardia has licensed seven early-stage BTG products and willrepay BTG $32 million over the next four years in return for BTG'sresearch, development, preclinical and clinical development of thelicensed cardiovascular, neonate pulmonary and ophthalmicproducts.
Berkovits told BioWorld that the company expects payments fromBio-Cardia of $10 million during 1994.
Under the agreement, BTG of Iselin, N.J., maintains exclusive rights tothe products. The agreement covers Imagex, its product for blood clotdetection, which is currently in Phase I trials; Oxsodrol BPD, aproduct for the inhibition or prevention of broncho-pulmonarydysplasia that recently completed Phase I clinicals; and Biolon, avisco-elastic product approved in Canada and several Europeancountries that is used as a lubricant during ophthalmic surgery.
The agreement also covers four products in preclinicals: Bio-Flow, forprevention of re-occlusion/restenosis; Factorex, an anti-coagulant;Bio-Lase, an acute re-occlusion inhibitor; and Oxsodrol CVD, a re-occlusion/restenosis inhibitor.
BTG's stock closed unchanged on Monday at $5.25 per share.
-- Karl A. Thiel Special to BioWorld
(c) 1997 American Health Consultants. All rights reserved.