SOUTH SAN FRANCISCO, Calif., Feb. 5 /PRNewswire-FirstCall/ -- Cell
Genesys, Inc. (Nasdaq: CEGE) announced today that it has entered into a new
Committed Equity Financing Facility (CEFF) with Kingsbridge Capital
Limited, an institutional investor, in which Kingsbridge has committed to
provide up to $75 million of capital during the next three years through
the purchase of newly-issued shares of Cell Genesys common stock. The CEFF
allows Cell Genesys to raise capital at the time, price and in amounts
deemed suitable to the Company to support Cell Genesys' corporate, research
and development activities. Under the terms of the CEFF, Kingsbridge may
not sell short the Company's stock during the term of the agreement. The
Company had previously entered into a similar transaction with Kingsbridge
in March 2006. The Company has drawn down all of the shares available under
the previous CEFF.
"We are very pleased with the outcome of our first CEFF with
Kingsbridge," said Sharon E. Tetlow, senior vice president and chief
financial officer of Cell Genesys. "We raised approximately $35.1 million
in proceeds by selling 8.7 million shares over a nine-month period. We are
fortunate to continue to have the resources necessary to advance our lead
program, GVAX(R) immunotherapy for prostate cancer, through Phase 3
development."
Certain details of the CEFF are as follows:
* For a period of three years, Cell Genesys can access up to $75
million dollars from Kingsbridge in exchange for newly-issued shares
of Cell Genesys common stock. Cell Genesys may access the capital
after the Securities and Exchange Commission (SEC) declares
effective the registration statement to be filed by Cell Genesys
covering the resale of the shares of common stock issuable in
connection with the CEFF and the shares of common stock underlying
the warrant discussed below.
* Cell Genesys may access capital under the CEFF in tranches of up to
the lesser of $15 million or 2.5% of Cell Genesys' market
capitalization at the time of the draw down of such tranche, subject
to certain conditions; provided that no more than once per fiscal
quarter, Cell Genesys can draw down up to 3.5% of its market
capitalization but still subject to the $15 million limit. Each
tranche will be issued and priced over an eight-day pricing period.
Kingsbridge will purchase shares of common stock pursuant to the
CEFF at discounts ranging from 6% to 10%, depending on the average
market price of the common stock during the eight-day pricing
period, provided that the minimum acceptable purchase price for any
shares to be issued to Kingsbridge during the eight-day period is
determined by the higher of $1.75 or 85% of Cell Genesys' share
price the day before the commencement of each draw down.
* Throughout the term of the agreement, Kingsbridge is restricted from
engaging in any shorting transaction of Cell Genesys' common stock.
* Cell Genesys is not obligated to utilize any of the $75 million
available under the CEFF and there are no minimum commitments or
minimum use penalties. The CEFF agreement does not contain any
restrictions on Cell Genesys' operating activities, automatic
pricing resets or minimum market volume restrictions.
* The agreement does not prohibit Cell Genesys from conducting
additional debt or equity financing, other than financings similar
to the CEFF.
* In connection with the CEFF, Cell Genesys issued a warrant to
Kingsbridge to purchase up to 421,918 shares of common stock at an
exercise price of $4.68 per share which represents a 45% premium
over the average of the closing bid prices of Cell Genesys' common
stock during the 5 days preceding the signing of the agreement. The
warrant will become exercisable after the six month anniversary of
the date of the agreement. The warrant will remain exercisable,
subject to certain exceptions, until five years after the date of
the agreement.
The securities issuable in connection with the CEFF and upon the
exercise of the warrant issued to Kingsbridge have not been registered
under the Securities Act of 1933 and may not be offered or sold in the
United States absent registration under the Securities Act of 1933 and
applicable state securities laws or available exemptions from registration
requirements. Cell Genesys has agreed to file a registration statement for
the resale of the shares of common stock issuable in connection with the
CEFF and the shares of common stock underlying the warrant within 60 days
of the date of the agreement. This press release shall not constitute an
offer to sell or the solicitation of an offer to buy these securities, nor
shall there be any sale of these securities in any state which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.
Cell Genesys is focused on the development and commercialization of
novel biological therapies for patients with cancer. The company is
currently pursuing two clinical stage product platforms - GVAX(R) cancer
immunotherapies and oncolytic virus therapies. Ongoing clinical trials
include Phase 3 trials of GVAX immunotherapy for prostate cancer, Phase 2
trials of GVAX immunotherapy for pancreatic cancer and leukemia, and a
Phase 1 trial of CG0070 oncolytic virus therapy for bladder cancer. Cell
Genesys continues to hold an equity interest in its former subsidiary,
Ceregene, Inc., which is developing gene therapies for neurodegenerative
disorders. Cell Genesys is headquartered in South San Francisco, CA and has
its principal manufacturing operation in Hayward, CA. For additional
information, please visit the company's website at http://www.cellgenesys.com.
Statements made herein about the company, other than statements of
historical fact, including statements about the company's progress, results
and timing of clinical trials and preclinical programs and the nature of
product pipelines are forward-looking statements and are subject to a
number of uncertainties that could cause actual results to differ
materially from the statements made, including risks associated with the
success of clinical trials and research and development programs, the
regulatory approval process for clinical trials, competitive technologies
and products, patents, continuation of corporate partnerships and the need
for additional financings. For information about these and other risks
which may affect Cell Genesys, please see the company's Annual Report on
Form 10-K for the year ended December 31, 2005 filed on March 13, 2006 as
well as Cell Genesys' reports on Form 10-Q and 8-K and other reports filed
from time to time with the Securities and Exchange Commission. The company
assumes no obligation to update the forward-looking information in this
press release.
SOURCE Cell Genesys, Inc.
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Related links:
http://www.cellgenesys.com
CONTACT:
Ina Cu, Investor Relations of Cell Genesys,
Inc., +1-650-266-3200
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