MORRIS PLAINS, N.J., April 27 /PRNewswire-FirstCall/ -- Immunomedics, Inc.
(Nasdaq: IMMU) today announced the signing of definitive agreements to
complete approximately $36 million in financing through the issuance of its 5%
Senior Convertible Notes due 2008 and common stock warrants. The private
placement, which will be sold to qualified institutional investors and
institutional accredited investors, is expected to close on Friday, April 29,
subject to customary closing conditions. Each note will be entitled to a
semi-annual payment of interest at an annual rate of 5.0% and be convertible
into Immunomedics common stock at an initial conversion price of $2.62.
Interest will be payable, at the discretion of the Company, in cash or,
subject to certain conditions, in shares of Company common stock. The
warrants will be exercisable commencing on the effective date of the share
increase described below until the third anniversary of the initial closing
date at an initial exercise price of $2.98 per share of common stock. At
closing, each purchaser will be granted a 120-day option to purchase up to an
additional 20% of notes and warrants at the offering price plus accrued
interest based on their initial purchase.
Holders of the notes may at their election at any time, and the Company
may, subject to certain market performance targets and other conditions, cause
the holders to, convert the notes into shares of common stock prior to the
maturity date. If the notes are converted prior to the third anniversary of
the issue date, the holders will be entitled to interest through the third
anniversary. The Company will retire at closing its 3.25% Convertible Notes
due January 2006, of which $5 million will be paid from the proceeds of the
offering and the balance will be converted into a like amount of this new
issue.
"The funds raised will enable us to move forward independently with
registration trials for our lead product, epratuzumab, in moderate and severe
lupus patients, serve general working capital purposes, and retire our
outstanding 3.25% Convertible Notes due January 2006," commented Gerard G.
Gorman, Vice President, Finance and Chief Financial Officer. "At the same
time and without delaying our trials, we continue to hold discussions with
potential partners for epratuzumab in all indications with the aim of securing
the best possible agreement for our product and for our shareholders," he
added.
As soon as practicable, the Company intends to call a special meeting of
its stockholders to request a 40 million share increase to its authorized
common stock to include 7.43 million additional shares required for conversion
of all of the notes and exercise of all of the warrants. The Company will
have available at closing approximately 8.92 million shares of authorized
common stock, including shares formerly reserved for conversion of the
Company's 3.25% Convertible Notes due January 2006, which it will reserve for
the conversion of the notes; at the initial conversion rate, the Company
requires approximately 16.35 million, or 7.43 million additional shares of
unrestricted authorized common stock. Under the terms of the indenture
pursuant to which the notes will be issued, the Company is required within 120
days of issue to obtain shareholder approval to increase the Company's
authorized common stock by not less than 7.43 million shares or be subject to
successive monthly increases in the interest rate, subject to a cap.
Under the terms of the indenture, the Company will also be required to
escrow approximately $12.3 million of the note proceeds until it obtains
shareholder approval and files an amended certificate of incorporation
reflecting at least the required share increase. If the Company does not
complete the required share increase within 120 days of issue, the holders
will have the right to require the Company to repurchase the notes at a future
date.
At the closing, the notes, warrants and underlying shares will not have
been registered under the Securities Act of 1933, as amended, or any state
securities laws, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
Holders of the notes and common stock issuable upon conversion of the notes
and exercise of the warrants may register their securities pursuant to a
registration statement that the Company will use its best efforts to file
within 120 days and cause to be effective within 180 days of issue. Interest
on the notes will be subject to successive monthly increases, subject to a
cap, if the registration statement covering the notes and the shares is not
filed or effective, as the Company has agreed.
Immunomedics is a biopharmaceutical company focused on the development of
monoclonal, antibody-based products for the targeted treatment of cancer,
autoimmune and other serious diseases. We have developed a number of advanced
proprietary technologies that allow us to create humanized antibodies that can
be used either alone in unlabeled or "naked" form, or conjugated with
radioactive isotopes, chemotherapeutics or toxins, in each case to create
highly targeted agents. Using these technologies, we have built a pipeline of
therapeutic product candidates that utilize several different mechanisms of
action. We believe that our portfolio of intellectual property, which
includes approximately 90 issued patents in the United States, and more than
250 other issued patents worldwide, protects our product candidates and
technologies.
This release, in addition to historical information, contains
forward-looking statements made pursuant to the Private Securities Litigation
Reform Act of 1995. Such statements, including statements regarding clinical
trials, out-licensing arrangements, and capital raising activities, involve
significant risks and uncertainties and actual results could differ materially
from those expressed or implied herein. Factors that could cause such
differences include, but are not limited to, risks associated with new product
development (including clinical trials outcome and regulatory
requirements/actions), competitive risks to marketed products and availability
of financing and other sources of capital, as well as the risks discussed in
the company's Annual Report on Form 10-K for the fiscal year ended June 30,
2004. The company is not under any obligation, and the company expressly
disclaims any obligation, to update or alter any forward-looking statements,
whether as a result of new information, future events or otherwise.
Immunomedics, Inc. will file a proxy statement with the SEC concerning the
share increase. INVESTORS ARE URGED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the
documents free of charge at the website maintained by the SEC at
http://www.sec.gov. In addition, investors may obtain documents filed with the
SEC by Immunomedics, Inc. free of charge by requesting them in writing from
Immunomedics, Inc. at 300 American Road, Morris Plains, NJ 07950, Attention:
Investor Relations, or by telephone at (973) 605-8200.
Company Contact: Chau Cheng, Associate Director, Investor Relations &
Business Analysis, (973) 605-8200, extension 123. Visit the company's web
site at http://www.immunomedics.com.
SOURCE Immunomedics, Inc.
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Related links:
http://www.Immunomedics.com
Company News On-Call:
http://www.prnewswire.com/comp/113121.html
CONTACT:
Chau Cheng, Associate Director, Investor
Relations & Business Analysis of Immunomedics, Inc.,
+1-973-605-8200, extension 123
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