MORRIS PLAINS, N.J., May 2 /PRNewswire-FirstCall/ -- Immunomedics, Inc.
(Nasdaq: IMMU) today announced that it closed a private placement of its 5%
Senior Convertible Notes due 2008 and common stock warrants, which raised a
total of $37.675 million. The notes and warrants were sold to qualified
institutional buyers and institutional accredited investors. Lazard Freres &
Co. LLC, investment banker to the company, served as sole lead placement agent
with C.E. Unterberg, Towbin as co-placement agent.
"This financing comes at an important stage of our development. The funds
will allow us to maximize our options as we prepare for pivotal trials of our
lead product candidate, epratuzumab, in lupus patients. We can now dedicate
substantial efforts toward the lupus trials independently, while at the same
time we discuss support with potential global licensing partners," commented
Gerard G. Gorman, Vice President, Finance and Chief Financial Officer.
Information on this financing is available in the Investor Relations section
on our website in a Frequently Asked Questions format.
"Our goal is to bring to market as quickly as possible a product that
potentially can help improve the quality of life for lupus patients. The
details of our protocols have been finalized with the U.S. Food and Drug
Administration (FDA), the European Medicines Agency (EMEA), and our principal
clinical investigators, and we believe we are on schedule to initiate two
pivotal phase III clinical trials in the first half of 2005. These trials
will further evaluate the safety and efficacy of epratuzumab for the treatment
of patients with moderate to severe lupus, a pervasive and often fatal disease
that is in great need of new therapy options," said Cynthia L. Sullivan,
President and Chief Executive Officer. "We are pleased with the support our
investors have demonstrated by providing the funds necessary to further our
overall growth strategy as we continue to evaluate potential strategic
partnerships," she added.
The notes mature three years from the date of issuance, are convertible
into company common stock at an initial conversion rate of $2.62 per share and
bear interest at the rate of 5% per annum. If a note is converted or
cancelled prior to maturity, the holder will be paid on the date of conversion
or cancellation any interest that would have otherwise been earned during the
three-year term. For each $1,000 principal amount of notes purchased,
purchasers were granted a warrant to purchase approximately 76.39 shares of
common stock. The warrants may be exercised only after the share increase
described below occurs. The warrants expire three years from the initial
closing date and will be exercisable at $2.98 per share.
In addition to the funds raised in the offering, purchasers of the notes
and warrants were granted an option to purchase up to an additional 20%
principal amount of notes and warrants during the 120 day period following the
closing, which could result in additional gross proceeds to the Company of up
to $7.535 million.
The notes and warrants have not 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, warrants and common stock
issuable upon conversion of the notes or exercise of the warrants may register
their securities pursuant to a registration statement that the Company agreed
to use its best efforts to file within 120 days and cause to be effective
within 180 days of issue.
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 approximately 8.35 million additional shares required
for conversion of all of the notes and exercise of all of the warrants issued
at the initial closing. The Company had available at closing approximately
8.92 million shares of unrestricted authorized common stock, including shares
formerly reserved for conversion of the Company's 3.25% Convertible Notes due
2006, which it will reserve for the conversion of the notes; at the initial
conversion rate, the Company requires approximately 17.27 million, or
8.35 million additional shares of unrestricted authorized common stock to
convert the notes and permit the exercise of warrants issued in the initial
closing (the Company may require shares for conversion of notes or exercise of
options if investors exercise the 20% option described above). Under the
terms of the indenture pursuant to which the notes were issued, the Company is
required within 120 days of the initial closing to obtain shareholder approval
to increase the Company's authorized common stock by not less than 5.5 million
shares or be subject to successive monthly increases in the interest rate,
subject to a cap.
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 described above. 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, Immunomedics, Inc.,
+1-973-605-8200, extension 123
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