Viagene Inc. announced Thursday that it has completed itsinitial public offering, grossing $18 million on the sale of 2million shares of common stock at $9 per share.
The shares started trading Thursday on the NASDAQ NationalMarket System under the symbol VIGN. The offering wasmanaged by Alex. Brown & Sons Inc., CS First Boston andNomura Securities International Inc.
Viagene's offering came up short; the company had filed onNov. 16 for an offering of 2.5 million shares, priced from $11-13 per share, which could have raised as much as $32.5 millionfor the San Diego company.
One of Viagene's new stockholders is Chiron Corp.(NASDAQ:CHIR), which on Nov. 16 invested $20 million in thegene therapy company as part of a collaborative agreement todevelop gene transfer products for the prevention andtreatment of cancer, as well as a drug-activation technology forpreventing and treating a broad range of human diseases.
Chiron's purchase of 1.6 million shares as well as warrants topurchase an additional 2.75 million shares (which expire inNovember 1998) gave it a 15 percent equity ownership inViagene at the completion of the IPO. But because fewer shareswere sold than expected and they were priced lower thanhoped, Chiron's ownership is now up to 18.4 percent, saidRobert Abbott, Viagene's president and chief executive officer.
The agreement with Chiron was structured to give it "someanti-dilutive protection based on the pricing of the IPO," Abbotttold BioWorld. Now, Viagene has an obligation to issue to Chironan additional 355,000 shares to adjust for the pricing of theIPO, he said. Including the anti-dilutive stock, Viagene now has10.6 million shares outstanding.
The gene therapy company also has somewhat less than $40million in cash -- $22 million prior to the offering, Abbottadded.
-- Jennifer Van Brunt Senior Editor
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