Genzyme Corp. and Neozyme II Corp. on Wednesday announcedthat they have raised $73.5 million in a public offering of 2.1million Neozyme units priced at $35 per unit.
Neozyme II will receive the proceeds of the offering and willcontract with Genzyme to develop protein replacement andgene therapy treatments for cystic fibrosis. The R&D spinoffwill spend about $15 million annually on the programs.
"We hope these funds will take us all the way through an endproduct," said spokeswoman Susan Cogswell.
The price and number of shares were unchanged from thepreliminary prospectus.
Each unit consists of one share of callable common stock ofNeozyme II, a series N warrant to purchase a share of Genzymecommon stock at $38.25 and a callable warrant to buy a shareof Genzyme stock at a price equal to the average of the closingprice of the stock for a specified period. The callable warrant isonly exercisable if Genzyme fails to exercise its option toacquire all of Neozyme II's stock at any time through Dec. 31,1996.
Neozyme units (NASDAQ:NIIZF) closed unchanged at $35.Genzyme shares (NASDAQ:GENZ) gained $1.50 to $39.75 onWednesday.
Genzyme may acquire the Neozyme stock for $48 per sharethrough the end of 1993, for $62 in 1994, for $83 in 1995 andfor $117 in 1996.
The units will trade together through Aug. 3. Thereafter, theseries N warrants will be exercisable and trade separately.
Neozyme II will be licensed rights and technology for the CFprotein replacement therapeutic program developed byNeozyme Corp. (Neozyme I). Genzyme will exercise its option topurchase the rights from Neozyme I for $23 million in cashand/or Genzyme stock by Dec. 31.
Neozyme I's program is focused on cystic fibrosistransmembrane regulator, the protein coded by the geneassociated with CF. In January, Genzyme reported that it hasdeveloped transgenic mice able to produce the protein in theirmilk. Protein replacement trials won't begin until about 1994.The gene therapy program is in earlier development.
Remaining in Neozyme I's portfolio are programs for thyroidcancer, burn treatment, cholesterol and prenatal testing, andsynthetic phospholipids.
Underwriters PaineWebber Inc., Shearson Lehman BrothersInc. and Cowen & Co. have a 315,000-share overallotmentoption.
(c) 1997 American Health Consultants. All rights reserved.