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Metabasis Therapeutics Raises
Approximately $10 Million Through a Warrant Exchange and
Concurrent Private Placement
SAN DIEGO, CA – April 16, 2008 -- Metabasis Therapeutics, Inc. (Nasdaq:
MBRX) today announced that it had raised approximately $10
million through the successful completion of a warrant exchange
and concurrent private placement. Metabasis intends to use the
proceeds from the transaction for general corporate purposes,
including the further clinical development of MB07803 and
MB07811 for the treatment of diabetes and hyperlipidemia,
respectively.
The participants in the transaction were certain current
investors who held existing warrants for the purchase of common
stock issued previously by the Company in its October 2001 and
October 2005 private placements. Pursuant to the transaction,
Metabasis reduced the exercise prices of the existing warrants
held by the participants in exchange for the immediate exercise
of the warrants. Metabasis also sold additional shares of common
stock and warrants for the purchase of common stock in a
concurrent private placement. Collins Stewart LLC acted as
exclusive financial advisor to Metabasis in connection with this
transaction.
The reduced exercise price of the existing warrants and the
purchase price of the common stock sold in the concurrent
private placement were both $2.34 per share, the consolidated
closing bid price of the Company’s common stock immediately
preceding the entering into the binding agreement for the
transaction (the Closing Bid Price). In addition, each
participant who exercised a warrant from the October 2005
private placement received a new warrant to purchase 20% of the
number of shares of common stock acquired upon such exercise,
and each participant who purchased shares of common stock in the
concurrent private placement received a new warrant to purchase
30% of the number of shares of common stock the participant
acquired in the private placement. The new warrants have a five
year term and an exercise price equal to 115% of the Closing Bid
Price.
“The structure of this transaction allowed us to accomplish a
number of objectives,” said John W. Beck, senior vice president
of finance and chief financial officer. “First, we were able to
raise a meaningful amount of operating capital; second, we were
able to provide the participants in the transaction the
opportunity to enhance their existing positions in the Company
at our current price; and third, we were able to reduce the
dilutive effect of potential future warrant exercises by
reducing the number of outstanding warrants. This transaction is
entirely in keeping with our revised strategic plan which is
focused on enhancing shareholder value by advancing our product
candidates further into clinical trials while minimizing
dilution to our existing stockholders.”
Under the transaction, warrants for the purchase of 127,557
shares of common stock with an exercise price of $8.70 per share
and warrants for the purchase of 1,558,279 shares of common
stock with an exercise price of $6.74 per share were exercised
at the Closing Bid Price. In addition, Metabasis sold 2,485,103
shares of common stock at $2.34 per share and warrants for the
purchase of 1,057,196 shares of common stock with an exercise
price of $2.69 per share. At the closing, investors in the
transaction paid an additional purchase price for the new
warrants equal to $0.125 per whole share issuable upon exercise
of the warrants.
As a result of the transaction, a total of 4,170,939 shares of
common stock were issued and the total number of shares issuable
upon the exercise of all outstanding warrants was reduced from
3,461,978 to 2,833,338 shares. Following the transaction,
Metabasis had 34,930,843 shares of common stock outstanding. The
existing warrants that were not exercised remain outstanding and
retain the terms that existed prior to the transaction.
The shares of common stock and warrants issued in the
transaction have not been registered under the Securities Act of
1933, as amended, or state securities laws and may not be
offered or sold in the United States absent registration with
the Securities and Exchange Commission or an applicable
exemption from the registration requirements. The Company has
agreed to file a registration statement with the Securities and
Exchange Commission within 30 days covering the resale of the
shares of common stock issued in the transaction and the shares
of common stock issuable upon exercise of the warrants issued in
the transaction. This press release is not an offer to sell or
the solicitation of an offer to buy the shares of common stock
or warrants issued in the transaction or any other securities of
the Company.
About Metabasis (www.mbasis.com):
Metabasis is a biopharmaceutical company using its proprietary
technologies, scientific expertise and unique capabilities for
targeting the liver and liver pathways. The Company has
established a broad pipeline of product candidates and advanced
research programs targeting large markets with significant unmet
needs. Metabasis' core area of focus is on the discovery and
development of drug candidates to treat metabolic diseases such
as hyperlipidemia and diabetes, among others. Although not a
core focus of the Company, Metabasis has also discovered and
developed drug candidates indicated for the treatment of liver
diseases such as hepatitis and primary liver cancer, which it
now intends to license or partner. All product candidates were
developed internally using proprietary technologies.
Forward-Looking Statements:
Statements in this press release that are not strictly
historical in nature constitute "forward-looking statements."
Such statements include, but are not limited to, references to
Metabasis' use of the proceeds from its recently completed
warrant exchange and concurrent private placement, its pursuit
of its corporate objectives, the dilutive effect of potential
future warrant exercises and other statements about Metabasis'
proprietary technologies, product candidates, research programs
and future collaborations. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause Metabasis' actual results to be materially
different from historical results or from any results expressed
or implied by such forward-looking statements. These factors
include, but are not limited to, risks and uncertainties related
to the progress and timing of clinical trials for Metabasis'
product candidates; the fact that positive results from
preclinical studies and early clinical trials does not
necessarily mean later clinical trials will succeed;
difficulties or delays in development, testing, obtaining
regulatory approval, producing and marketing Metabasis' product
candidates; serious adverse side effects or inadequate efficacy
of, or serious adverse events related to, Metabasis' product
candidates or proprietary technologies; the risk that Metabasis
will not be able to build more value or retain rights for direct
commercialization of its product candidates; Metabasis'
dependence on its licensees and collaborators for the clinical
development and registration of, as well as information relating
to, certain of its product candidates; potential conflicts with
collaborators that could delay or prevent the development or
commercialization of Metabasis' product candidates; the scope
and validity of intellectual property protection for Metabasis'
product candidates, proprietary technologies and their uses;
competition from other pharmaceutical or biotechnology
companies; Metabasis' ability to obtain additional financing to
support its operations; and other factors discussed in the "Risk
Factors" section of Metabasis' Annual Report on Form 10-K for
the fiscal year ended December 31, 2007 and in Metabasis' other
filings with the Securities and Exchange Commission. All
forward-looking statements are qualified in their entirety by
this cautionary statement. Metabasis is providing this
information as of this date of this release and does not
undertake any obligation to update any forward-looking
statements contained in this release as a result of new
information, future events or otherwise.
Contact:
Constance Bienfait
Vice President
Investor Relations & Corporate Communications
Metabasis Therapeutics, Inc.
(858) 622-5575
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