Company also negotiates licensing agreement to sell drug in China
By Devika Patel
Knoxville, Tenn., Sept. 8 - EntreMed, Inc. negotiated a $5.09 million registered direct offering of stock, according to a prospectus supplement filed Wednesday with the Securities and Exchange Commission.
The company will sell 1,886,662 common shares at $2.70 apiece. The per-share purchase price represents the consolidated closing bid price of the stock on Sept. 7.
Investors also will receive warrants for 377,327 common shares. The three-year warrants are exercisable at $2.825, a 3.48% premium to the Sept. 7 closing share price of $2.73.
The investor group was led by Tak W. Mak.
Settlement is expected Sept. 8.
Proceeds will provide capital to fund operations through 2011 and enable the company to move forward with expansion of development plans for ENMD-2076, which is in phase 1 and phase 2 clinical trials.
"I have been involved with ENMD-2076 since its discovery by Miikana," investor Mak, a scientific adviser to EntreMed, said in a press release. "We look forward to EntreMed's further development of this compound and are encouraged by its potential to improve the lives of cancer patients in the U.S. and abroad."
Concurrently with the execution of the securities purchase agreement, EntreMed entered into a rights agreement with Selected Value Therapeutics I, LLC under which Selected Value may exercise, on behalf of the investors, certain license, development and commercialization rights for ENMD-2076 in China.
If the option is exercised, EntreMed will be entitled to receive development milestone payments and royalties on future product sales within the geographic market. The option is exercisable at any time until Dec. 31, 2011.
"We worked with Selected Value Therapeutics to develop an innovative financing structure that accomplishes our financing goals with minimum dilution to our current investors," executive chairman Michael M. Tarnow stated. "The financing extends our cash runway through 2011.
"We are on track to complete our current phase 2 ovarian cancer study and, based on the results from our phase 1 studies, will move forward with our plans for expansion into additional clinical trials in other indications.
"We view both the investment in the company and the option to participate in the clinical development of the compound in China as a vote of confidence in the potential of ENMD-2076."
Based in Rockville, Md., EntreMed develops therapeutic treatments for cancer and inflammatory diseases.
| Issuer: | EntreMed, Inc.
|
| Issue: | Common stock
|
| Amount: | $5,093,987
|
| Shares: | 1,886,662
|
| Price: | $2.70
|
| Warrants: | For 377,327 shares
|
| Warrant expiration: | Three years
|
| Warrant strike price: | $2.825
|
| Investor: | Tak W. Mak (lead)
|
| Pricing date: | Sept. 8
|
| Settlement date: | Sept. 8
|
| Stock symbol: | Nasdaq: ENMD
|
| Stock price: | $2.73 at close Sept. 7
|
| Market capitalization: | $28.6 million
|
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