Protein therapy firm Medgenics Ltd. (AIM:MEDG) will hold a general shareholders meeting in order to get approval for a $5 million issue of convertible debentures or other debt securities. The board will have the discretion to increase the issue up to $7 million.
In order to hold the issue, Medgenics will have to obtain shareholders' approval to amend its certificate of incorporation, which grants them preemptive rights to prevent dilution of their holding. The company also wants to void articles that prevent such a large debt issue.
Medgenics is developing a sustained-action therapeutic protein delivery technology, called a biopump, for the treatment of a range of chronic diseases. The biopump is made from the patient’s own skin and is implanted in a simple procedure to work inside the patient’s body, to produce and deliver the active protein steadily over a sustained period to treat the targeted disease.
Medgenics warned shareholders and potential investors that if the debt issue was not successful, the company was at risk of insolvency, after losing 75% of its market cap since it went public in January 2008.
Medgenics noted that it has regularly reported progress in its ongoing Phase I/II clinical trial of Epodure for the treatment of anemia, has been shown to safe and effective. It added, "These results have drawn active interest from large pharmaceutical and medical device companies from which the company hopes to find long term strategic partners."
Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2009
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