Neocrin Inc. announced today that it has completed a $5 millionprivate placement of its preferred stock. The equity position in thefirm was acquired by its current investors, including BaxterHealthcare Corp. (NYSE:BAX), the venture capital firms of AspenVenture Partners, Asset Management Associates, Domain Associates,Forward Ventures, ML Venture Partners, New Enterprise Associatesand six other individual and institutional investors. The equityplacement was not offered to new investors.
Baxter formed Neocrin in 1992 as a partnership between itself andTranCel Corp. (On Sept. 1, that California general partnership becamea Delaware corporation.) "This financing (the $5 million privateplacement) was anticipated in the original partnership agreement,"said Thomas O'Hara, Neocrin's chief financial officer.
None of those investors' equity positions in the Irvine, Calif.,company changed as a result of the placement, explained O'Hara. Atroughly 50 percent, Baxter Healthcare remains the majorshareholder.
But the current investors' equities' will be diluted whenCytoTherapeutics Inc. (NASDAQ:CTII) transfers its diabetes programto Neocrin in exchange for an equity position, O'Hara told BioWorld.The merger, announced Sept. 9, creates an expanded program for thedevelopment of a bio-artificial pancreas.
The merger also gives CytoTherapeutics, of Providence, R.I., a chanceto reap the benefits from its diabetes-related technology while at thesame time devoting its internal resources to developing cell and genetherapies for central nervous system disorders. AndCytoTherapeutics has also attracted private capital: on Sept. 13 itannounced that it had closed an agreement to sell 2.5 million sharesof newly issued stock to private investors. The financing will gross$18.75 million.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.