Univax Biologics Inc. announced Monday that it has decided topostpone its secondary offering of 2.5 million shares ofcommon stock. The Rockville, Md., company (NASDAQ:UNVX)filed for the offering -- including an overallotment of 375,000shares -- on Jan. 4.
The managing underwriters are Prudential Securities Inc. andMontgomery Securities.
"A significant amount of uncertainty in the market forbiotechnology stocks has forced down the price of Univax'sstock to an unacceptable level," said Thomas Stagnaro, Univax'spresident and chief executive. "Given the company's existingcash resources of more than $30 million, we believe that it isprudent to wait. We will continue to monitor the market andUnivax's stock price. If conditions improve, we will considerproceeding with the offering."
The company's stock gained $1.75 a share on Monday, closingat $10.
Analysts feel that it's too early to tell whether Univax's retreatsignifies the "beginning of the end" of the present publicfinancing window, or is simply a situation unique to thecompany.
For Jay Silverman, an analyst at Wertheimer Schroder, Univax'shesitation is at least "a yellow flag." According to Silverman,"this could be a sign of a slowdown in financing for companiesunless they are well-covered (by analysts) or have somethingexciting to talk about."
But Mark Edwards of Recombinant Capital said he thinks thatthe move reflects the "company's determination as to thetiming" of the offering and not a signal to other companies,although it's clear that "the market is not embracing biotecheven as much as it did one-and-a-half weeks ago."
Univax's secondary offering would have grossed from $20.6 to$25 million. When the company completed its IPO lastFebruary 1992, it sold 4 million shares at $12 each, grossing$48 million. The stock closed out 1992 at $10.75, down about10 percent from the IPO price.
Univax's development-stage products include vaccines as wellas polyclonal antibodies for vaccine development. The companygot approval from FDA in mid-January to conduct a plasmadonor stimulation program using Genentech Inc.'s (NYSE:GNE)recombinant gp120 HIV vaccine, with the hopes of testing theantibodies produced by these donors in clinical trials forpreventing and treating HIV infection.
Univax also has exclusive U.S. marketing rights to a polyclonalantibody product for treating the autoimmune diseaseidiopathic thrombocytopenic purpura in HIV-infectedindividuals. The product, WinRho SD, is manufactured byWinnepeg, Manitoba company Rh Pharmaceuticals.
-- Jennifer Van Brunt Senior Editor
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