After its price climbed over 50% in January-September 2015, Medgenics Ltd. (AIM:MEDG; NYSE MKT: MDGN) decided to take advantage of the higher price to issue more shares. The company yesterday announced that its offering had been completed, including the underwriters' green shoe option.
Medgenics raised $46 million gross at $6.50 a year, 12% below the market price. As part of its offering, the company issued 7.1 million new shares, amounting to 23% of the company's share capital. Medgenics' market cap is $236 million. The company had $22 million in cash at the end of the second quarter, after finishing the first half with a $15 million loss and no sales.
Ups and downs
In its prospectus for the current flotation, Medgenics stated that it was planning to use the proceeds from the offering to finance its R&D activity and clinical trials of its products, invest in equipment and working capital, and to pay for its general business needs. The underwriters advising the company in the offering were Piper Jaffray (the chief underwriter), JMP Securities, and Needham & Company, LLC. Medgenics held its Wall Street IPO in 2011.
Located in Misgav in the Galilee, the company operates in genomic medicine, with a focus on identification and treatment of patients with diseases that change their way of life. The company is developing an implant that releases a drug genetically engineered from the patient's skin for the purpose of treating mainly rare diseases in adults and children. Medgenics' pipeline includes a number of products, including one for treating hematological problems, which is slated to being Phase II clinical trials, and one for treating anemia that is also in Phase II clinical trials. The company began operating in 2000, and was closed down after three years, but later reopened and continued development of its products.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2015
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