Gensia Pharmaceuticals Inc. plans to fund continueddevelopment of three of its early-stage ARA programs througha proposed $50 million unit offering.
The company announced Tuesday that it has filed for a publicoffering of 2.5 million units of a newly formed company,Aramed Inc., at an expected price of $20 per unit. Each unitconsists of one share of Aramed callable common stock and awarrant to buy a share of Gensia common stock.
The offering will provide Gensia with contract revenue tooffset R&D expenses without having to give up product rightsto a corporate partner, said spokeswoman Martha Hough. Thedeal is similar to other unit offerings, such as the SciGenicsInc. units sold by Genetics Institute Inc. in May.
Aramed will contract with Gensia to conduct research anddevelopment in three programs: second-generation adenosineregulating agents (ARAs) for use in the intravenous treatmentof acute cardiovascular indications, ARAs for the oral andintravenous treatment of certain seizure disorders, and ARAsand adenoseine agonists for the intravenous treatment of acutecerebrovascular indications.
The company's lead ARA compound, Arasine, is not part of thedeal. Arasine is in Phase III trials to reduce heart attacks inpatients undergoing coronary artery bypass surgery.
Adenosine is a natural purine that, when released locally, isthought to play an important role in mechanisms that reducecellular damage in certain diseases. Gensia said ARAs have aunique mode of action that results in the site-specific andevent-specific increase in levels of adenosine.
An exercise price has not yet been set on the five-yearwarrants. The warrants and stock would begin tradingseparately on Oct. 1, 1993.
The San Diego company will have the right to acquire all ofAramed stock at prices beginning at $32.25 per share on Jan. 1,1993, and rising to $55.40 on Jan. 1, 1995.
Alternatively, Gensia also has the right to repurchase for $60million the rights to both the seizure disorders and acutecerebrovascular programs. Gensia can't repurchase thecardiovascular program separately.
Underwriters Alex. Brown & Sons. Inc., Montgomery Securitiesand PaineWebber Inc. have an option to buy an additional375,000 units to cover overallotments.
In March, Gensia raised $33.4 million in a secondary offering of2.3 million shares priced at $14.50. Gensia stock(NASDAQ:GNSA) was up $1.75 on Tuesday, closing at $38.
-- Karen Bernstein BioWorld Staff
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