New York investor David Blech will provide a minimum of $7million in new capital to NeoRx Corp., the company announcedWednesday.
The terms provide that for each $1 million invested, Blech willreceive 1 million shares of common stock, 500,000 five-yearwarrants to purchase common stock at $1.75 per share, and500,000 five-year warrants to purchase common stock at$2.50 per share. NeoRx stock (NASDAQ:NERX) on Wednesdayclosed at $2.25, up 19 cents.
Blech's initial purchase of 7 million shares would bring thenumber of NeoRx shares outstanding to 22 million, giving Blech32 percent of shares outstanding. If Blech exercises all thewarrants, his total investment would come to $21.9 millionand he would hold 14 million shares of NeoRx stock.
The private financing is scheduled to be completed by the endof the year. It requires approval by NeoRx's board andauthorization of an increase in shares by the company'sstockholders at a special meeting to be held in late October.
Eastman Kodak Co. is currently NeoRx's largest shareholder,with 5.1 million shares of common stock and 120,000 sharesof convertible exchangeable preferred stock.
Kodak's Sterling Drug division held rights outside the UnitedStates to rhenium-labeled cancer therapeutics developed byNeoRx for Sterling under a contract that expired Dec. 31, 1990.NeoRx and Sterling are engaged in "very fruitful negotiations"over whether Sterling has any residual rights under thecontract, said NeoRx President Paul Abrams.
NeoRx has filed for Food and Drug Administration marketingapproval for two monoclonal antibody-based imaging productsto detect metastatic melanoma and small cell lung cancer.
The Seattle-based company has three rhenium-labelledantibodies in Phase I clinical trials to treat ovarian cancer,small cell lung cancer, and for intravenous administration forany tumor to which the antibody binds -- primarily colon, lungand breast cancers.
NeoRx lost $17.8 million, or $1.26 per share, on revenues of$2.4 million in its fiscal year ended last Sept. 30,.
-- Karen Bernstein BioWorld Staff
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