Memory Pharmaceuticals secures $30.6 million from stock sale; GenVec raises $15.3 million

By Sheri Kasprzak

New York, Sept. 21 - Biopharmaceutical companies Memory Pharmaceuticals Corp. and GenVec Inc. headed up PIPE news Monday, with Memory seeking to raise $30.59 million and GenVec raising $15.30 million.

Memory, a Montvale, N.J.-based company focused on treatments for central nervous system disorders, will issue 16.1 million shares at $1.90 each.

The company had 21,037,447 outstanding common shares as of Aug. 8.

The investors, comprised of both new and existing institutional and accredited investors, will also receive warrants for 5.6 million shares, exercisable at $2.22 each.

The deal is expected to wrap up by Sept. 23, and the proceeds will be used for clinical, pre-clinical and exploratory research, as well as for working capital and general corporate purposes.

"The proceeds from this financing should fund our operations through 2006 and provide us with the resources to progress some of our more advanced drug candidates into clinical trials designed to demonstrate their efficacy in patients," said Jim Sulat, the company's president and chief executive officer, in a statement.

"This company has demonstrated its ability to develop a robust pipeline that today consists of drug candidates in active clinical trials and multiple compounds from multiple programs in various other stages of development and we are delighted by the support that we have received from new and existing investors during this financing."

Sulat did not return requests for additional comment on the deal by press time Wednesday.

The offering was announced Wednesday afternoon, and Memory's stock slipped $0.03 to close at $1.83.

As to its earnings, Memory's net losses increased over the second quarter of 2004.

For the quarter ended June 30, 2005, the company reported a net loss of $8,408,000 compared to a net loss of $5,819,000 for the same quarter of 2004.

The company's revenues have not been generated by commercial products but rather by its collaborations with Roche Pharmaceuticals, according its latest earnings report.

Looking elsewhere in the biopharmaceutical sector, GenVec, Inc. is getting ready to settle a $15.3 million direct placement of shares.

The company expects to sell 7.65 million shares at $2.00 each by Sept. 26 to a group of institutional investors.

GenVec had 55,812,535 outstanding common shares as of July 31.

News of the offering was released Wednesday morning, as the company initially announced that it had secured $14.5 million from the deal. The announcement was updated Wednesday afternoon with word that the GenVec had sold another 400,000 shares.

GenVec's stock sank 14.7%, or $0.36, to end the day at $2.09 before gaining a penny in after-hours trading.

The shares will be issued under the company's shelf registration.

SG Cowen & Co. LLC is the placement agent.

The proceeds will be used for ongoing product development, clinical trials, the expansion of manufacturing capabilities and general corporate purposes.

For the quarter ended June 30, 2005, the company reported a net loss of, $2,956,000, down from a net loss of $4,776,000 for the second quarter of 2004.

Based in Gaithersburg, Md., GenVec is a biopharmaceutical company focused on developing treatments for cancer and cardiac disease.

Rita may spark oil deals

Oil prices headed northward Wednesday as oil refineries in Texas battened down the hatches in preparation for Hurricane Rita, causing some sellsiders to suggest that energy companies may hop back into the PIPE market with some offerings later this week and into next week.

"We could see some," said one market source based in Toronto. "I imagine this [gains from the hurricane] could go on for the rest of the week. It could impact oil companies enough to generate some deals."

Another sellsider in Canada agreed.

"I would expect it," he said, noting that there's always a slight increase in energy offerings any time oil prices rise.

On Wednesday, oil gained $0.60 to close at $66.80.

Of course, the gains in oil have shoved stocks down and this may negatively affect issuance in other sectors of the market, said one sellside source based in New York.

"They [stocks] took a beating today and unfortunately I think with this new hurricane, that might be the case again tomorrow," he said. "It probably won't be good for us [PIPE deals]."

This sellsider said he feels more direct offerings may come to pass for companies that do need funds but don't want to shop a deal in a softening stock market.

The Dow Jones Industrial Average dove 103.49 to close at 10,378.03; the Nasdaq composite index lost 24.69 to finish at 2,106.64, and the Standard & Poor's 500 composite index dropped 11.14 to close at 1,210.20.

Transco prices C$8 million shares

As for oil offerings, Calgary, Alta.'s Transco Resources Corp. arranged an C$8 million stock offering on Wednesday.

The deal includes up to 8 million shares.

After the pricing was announced Wednesday morning, Transco's stock jumped 11.2%, or C$0.14, to close at C$1.39.

Research Capital Corp. is the placement agent.

Transco is an oil and natural gas exploration company.

PolyMet's C$5.6 million unit offering

Another Canadian natural resources company, PolyMet Mining Corp., priced a C$5.6 million unit deal.

That offering includes up to 4 million units at C$1.40 each with the units being comprised of one share and one half-share warrant.

The whole warrants are exercisable at C$2.00 each for 18 months.

Proceeds will be used to finish a feasibility study on the Northmet property. The rest will be used for working capital.

Based in Vancouver, B.C., PolyMet is a mineral exploration company.

PolyMet's stock gained 6.02%, or C$0.10, to close at C$1.76 Wednesday.

Netsmart stock dips 3.3%

A day after raising $5.7 million in a private placement of stock, Netsmart Technologies, Inc.'s stock slipped.

The company's stock fell $0.40, or 3.36%, to close at $11.50.

On Tuesday, when the offering was announced, the company's stock gained 3.75%, or $0.43, to close at $11.90.

Netsmart sold units at $8.72 each to a group of institutional investors.

The offering is expected to close before Nov. 3.

The company also announced on Tuesday that it plans to acquire CHMC Systems Inc. for $13 million in cash and 435,730 in shares.

Based in Great River, N.Y., Netsmart develops software used in the health and human services sector.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.