Isis Pharmaceuticals Inc. became the latest biotechnologycompany to use the PIPE (private investment in public equity)financing vehicle to raise cash.
The Carlsbad, Calif., company on Wednesday said it placedabout 2.7 million newly issued shares of common stock(NASDAQ:ISIP) with a group of institutional and privateinvestors. Isis priced the new shares at $6.50 each, a 5.5percent discount from the trading price of the stock ($6.88) lastTuesday, the day the deal was finalized. The transaction wasarranged by Mehta and Isaly.
Isis filed the S3 registration statement covering the resale ofstock by the new purchasers on Wednesday. When thatstatement becomes effective, Isis gets the cash, and the newlyissued shares are tradable.
Isis intends to use the proceeds of this transaction to fund thecontinued development of its oligonucleotide-based drugcandidates ISIS 2105 for genital warts (currently in Phase IIclinical trials) and ISIS 2922 for cytomegalovirus retinitis inAIDS patients (currently the subject of an investigational newdrug application, which Isis filed in late October.)
This is the first time Isis has raised money from investors sinceJanuary, when it grossed $19.38 million in a follow-on offeringof 2.5 million shares of common stock at $7.75. At the end ofthe third quarter on Sept. 30, the company had about $37.8million in cash, cash equivalents and short-term investments.
Isis also reported a net loss of $4.6 million for the thirdquarter, a number that is in line with that reported in each ofthe previous quarters of 1993, said Jacqueline Siegel, vicepresident and chief financial officer. That number is areasonable approximation of the burn rate and the net loss forthe year will probably be along those lines, she added.
The stock closed Wednesday at $7.38 a share, up 50 cents.
-- Jennifer Van Brunt Senior Editor
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