Metabasis amends agreement with Kingsbridge for equity financing, warrants

By Devika Patel

Knoxville, Tenn., Feb. 15 - Metabasis Therapeutics, Inc. amended its agreement with Kingsbridge Capital Ltd. in regards to a $50 million equity financing facility that settled in November 2006, according to an 8-K filed Friday with the Securities and Exchange Commission.

The amendment states that the minimum acceptable purchase price for Metabasis' common stock in any pricing period will be the greater of $1.75 or 90% of the closing price of Metabasis' stock on the day before the pricing period begins.

The amendment also stipulates that the maximum amount of shares that Metabasis can require Kingsbridge to buy in such a pricing period will be equal to the lesser of $10 million or a specified percentage of Metabasis' market capitalization at the time of a drawdown under the purchase agreement.

The agreement also says Kingsbridge no longer has the right to shorten the term of the purchase agreement to two years from three years if Metabasis fails to make cumulative drawdowns of at least $1.25 million during any consecutive 12-month period after one year.

Metabasis also amended and restated the five-year warrant exercisable for 260,000 common shares, which it issued to Kingsbridge on Nov. 2, 2006. Among other things, the warrant strike price has been decreased to $4.63 per share from $9.26.

Based in San Diego, Metabasis is a biopharmaceutical company focused on the development of treatments for chronic diseases involving the pathway to the liver.

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