Karen BernsteinBioWorld Staff
Genzyme Corp. and Neozyme II Corp. on Tuesday said theyhave filed for a public offering of 2.1 million units to fundtreatments for cystic fibrosis.
Neozyme II will receive the proceeds of the offering and willcontract with Genzyme to develop protein replacement andgene therapy treatments for CF.
If the offering is completed, Genzyme will exercise its option topurchase from Neozyme Corp. by Dec. 31 the rights andtechnology for Neozyme I's CF protein replacement therapeuticprogram for $23 million in cash and/or Genzyme stock. Therights will be licensed to Neozyme II.
Neozyme I (NASDAQ:NEOZ) has been spending about $5 millionannually on the CF program, said spokeswoman Susan Cogswell."We knew when we set up Neozyme I that we would needmore money to complete research and development," she said."Plus we've stepped up the gene therapy approach, which wewere funding through Genzyme." Neozyme II will spend about$15 million annually on both programs.
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.
Genzyme shares were down 75 cents on Tuesday to $47.50 andNeozyme was unchanged at $26.50.
Each new unit consists of one share of callable common stock ofNeozyme II, one warrant to purchase a share of Genzymecommon stock (NASDAQ:GENZ) and one callable warrant topurchase a share of Genzyme common stock.
The proposed price of the units and the terms of the warrantshaven't been determined. Genzyme of Cambridge, Mass., willhave an option to acquire all of Neozyme II's common stockduring a specified time period at terms to be determined.
Underwriters PaineWebber & Co. Inc., Shearson LehmannBrothers Inc. and Cowen & Co. have a 315,000-unitoverallotment option.
Neozyme I will continue with other programs, which willreceive any unexpended funds from its CF program. Neozyme Iwill also determine the disposition of the proceeds from thesale of the CF rights.
In addition, the stock purchase option exercise prices ofNeozyme I common stock will be decreased to take into accountthe sale of the CF rights and technology from $38 per share to$28 per share on or before Dec. 31; from $50 to $35 on orbefore Dec. 31, 1993; and from $68 to $44 on or before Dec. 31,1994.
(c) 1997 American Health Consultants. All rights reserved.