Creative BioMolecules Inc. announced late Tuesday that it hasraised $16 million in a private placement of newly issuedshares of common stock.
The private investors are purchasing 2.9 million shares at$5.50 per share, a modest discount from the market price atthe time the transaction was negotiated, according to WayneMayhew III, chief financial officer of the Hopkinton, Mass.,company.
With the new issue, Creative BioMolecules will have about 18.6million shares of common stock outstanding, he added. Thestock (NASDAQ:CBMI) closed Tuesday at $7.75 a share, down 38cents.
Montgomery Securities arranged the financing; CreativeBioMolecules will receive the proceeds when a registrationstatement covering resales by purchasers becomes effective.
This transaction is the latest in a flurry of private financing ofpublic biotechnology companies. In this month alone four otherpublic companies have tapped into private monies, selling theshares at a discount to publicly traded ones. Those companiesare:
-- Enzo Biochem Inc. (ASE:ENZ), which on Aug. 19 announcedthat it had sold $7.2 million in newly issued shares to aEuropean investor group;
-- Pharmos Corp. (NASDAQ:PARS), which on Aug. 16 announcedplans to sell $10 million of newly issued stock to privateinvestors;
-- MedImmune Inc. (NASDAQ:MEDI), which on Aug. 13announced that it had placed $21 million of new stock in thehands of institutional investors;
-- Cephalon Inc. (NASDAQ:CEPH), which announced on Aug. 3that it had raised $3 million by placing 285,000 shares withventure capital firm Technology Leaders L.P.
When added to the $52 million in venture capital andinstitutional funds reaped by private biotechnology companiesthis month, the aggregate biotechnology universe has raised animpressive $109.2 million in August without having to chancethe unpredictable public markets.
Creative BioMolecules intends to use its newly garnered moniesfor developing its dental, gastrointestinal and osteoporosistherapeutic products, Mayhew said.
The company reported a $4 million loss for the quarter endedJune 30, so the $16 million, based on current spending levelsshould cover the company for about a year, Mayhew toldBioWorld.
-- Jennifer Van Brunt Senior Editor
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