Publicly traded MedImmune Inc. has turned to privateinvestors in its latest cash-raising effort. Like several otherbiotechnology companies before it who have taken thisfinancing route, MedImmune did the deal at a discount of itsstock relative to its market value.

Vector Securities International Inc. arranged the financialtransaction, announced Friday, in which MedImmune placed$21 million of newly issued common stock (NASDAQ:MEDI)with a number of institutional investors. The investorspurchased 1.12 million shares at $18.50.

The transaction won't actually close until a registrationstatement filed by MedImmune covering resales of the stockby the purchasers becomes effective. As soon as that happens,the shares will become "freely tradable," explained David Mott,MedImmune's vice president of business development andplanning.

This is one aspect of the transaction that makes it differentfrom the "usual" private placement by a public company, inwhich certain restrictions are placed on the resale of stocks.Another distinctive aspect of the transaction, according to Mott,is that the stock was valued at close to its public price, at$18.50.

The stock was discounted about 9 percent below the currentbid price of the stock, Mott told BioWorld. The stock fell $1.25 ashare on Thursday to close at $21, but recouped that loss onFriday.

Even at a discount this private placement brings the company"back over $50 million in cash on the balance sheet," Mott said.That does not include the $30 million the company gained fromits deal in July with American Cyanamid Co., which "providesaccess to a great deal of capital, but not all at once," Mottexplained.

Other publicly traded biotechnology companies that havetapped into private monies in the past few months have had toaccept discounts on their stock from 15 percent to 25 percent,according to Oppenheimer & Co. Inc. analysts David Ebersmanand Richard van den Broek. These companies include:

-- Alpha-Beta Technology Inc. (NASDAQ:ABTI). Investorspurchased 1 million newly issued shares of stock at $20 eachon June 3; it closed at $21.25 that day.

-- Celtrix Pharmaceuticals Inc. (CTRX). Investors purchasedapproximately 1.77 million shares at $5.94 per share on June 7,while the stock traded at $8 a share the day before.

-- And Cantab Pharmaceuticals plc (CNTBY), which raised $5million in a private placement to institutional investors on July23.

In the current financial environment, where "there's nodemand in the public market" for biotechnology stocks, "buyersare extracting prices that are favorable to them," saidEbersman.

The financial situation wasn't so severe in late 1992, the lasttime the public financing window was closed to biotechnology,van den Broek explained, because "companies weren't sodesperate for cash. They didn't access private monies." But "thistime around, a lot of them missed the window. They needmoney and are exploring alternative financing vehicles."

In fact, according to the Oppenheimer analysts, "of the 80companies (on their list of 125 biotechnology companies) thatare currently burning cash, at least 50 percent of them by theend of this year will have less than two years of cash left(assuming no new financings between now and then)."

-- Jennifer Van Brunt Senior Editor

(c) 1997 American Health Consultants. All rights reserved.