Sangamo Biosciences Inc. will collect about $65 million in gross proceeds from a public offering of 6. 1 million shares of common stock in an underwritten public offering. The company will funnel the money into continued research and development of its engineered zinc finger DNA-binding proteins (ZFP).
It also has product candidates in development in HIV/AIDS, hemophilia, Huntington’s disease and other disease indications.
The stock will be offered at $10.58 per share. Sangamo stock (NASDAQ:SGMO) gained 51 cents, to close at $11.09 on Wednesday.
“We’ve had a fairly modest burn rate, and we are expanding our pipeline. We felt it was prudent to do a financing to make sure the company continues to have a strong balance sheet,” Sangamo CFO Ward Wolff told BioWorld Today.
Wolff noted that the offering price for the stock was the same price at which the stock closed Tuesday, with no discount. “Because of demand and a strong group of biotech investors, we were able to do the offering at the same price we traded at the end of the day yesterday,” he said.
A robust financing environment for the life sciences over the past 12 to 18 months contributed to the company’s decision to pursue a public offering.
“We’re pleased based on the performance today as well as the interest in the transaction,” Wolff said.
Sangamo’s lead ZFP therapeutic, SB-728-T, for HIV/AIDS, is being studied in two clinical trials. It recently reported data from a Phase II trial of that product showing functional control of the virus at or below the limit of detection in CCR5 delta 32 heterozygote HIV-infected subjects treated with SB-728-T. It also has data from another study showing depletion of the HIV viral reservoir in subjects treated with SB-728-T.
Sangamo is partnered with Shire AG for development of several products. In an agreement signed with the Dublin-based pharma in 2012, Sangamo granted exclusive worldwide rights to Shire for the use of technology targeting four genes for blood-clotting Factors VII, VIII, IX and X in exchange for $13 million up front, plus research funding, milestones and royalties on product sales. Sangamo took responsibility for all activities through submission of an investigational new drug application and European clinical trial applications. Shire is responsible for clinical development and commercialization.
Sangamo’s program in Huntington’s disease also is partnered with Shire. Data from that program was presented at the annual meeting for the Society for Neuroscience in New Orleans in 2012, showing that a ZFP therapeutic can selectively repress the expression of the mutant disease-causing form of the huntingtin gene while leaving expression levels of the normal gene unchanged in cells derived from HD patients.
Sangamo also has license agreements with Sigma-Aldrich Corp. and Dow Agrosciences LLC. Its agreement with Sigma provides exclusive rights to develop and market laboratory research agents based on ZFP technology and ZFP-modified cell lines for commercial production.
Sangamo’s license with Dow Agrosciences, a subsidiary of Dow Chemical Corp., gives Dow access to ZFP technology and rights to use it to modify genomes or alter protein expression of plant cells, plants or plant cell cultures.
Sangamo added adeno-associated virus gene therapy technology to its capabilities with its acquisition of Ceregene Inc. in August. The assets it gained include CERE-110, a delivery system for Alzheimer’s disease currently in Phase II trials. (See BioWorld Today, Aug. 28, 2013.)
Ceregene’s large AAV intellectual property estate – more than 120 patents – will contribute to Sangamo’s development of ZFP therapeutics. Sangamo is using AAV for delivery of all of its in vivo ZFP therapeutic programs.
Wolff said that with the current financing, Sangamo will continue to invest in its technology for gene editing and gene regulation. “That’s what we’re known for, a robust preclinical pipeline,” Wolff said. “We will now focus on potentially expanding that pipeline. We do that with the notion that we’re pretty good custodians of investor dollars.”
Sangamo’s public offering includes a 30-day option to underwriters to purchase up to an additional 915,000 shares of common stock to cover overallotments, if any. The offering will close Sept. 23. Lazard Capital Markets LLC, JMP Securities LLC and Piper Jaffray and Co. are joint book-running managers and Cowen and Co. LLC are co-lead managers for the offering.
Sangamo had 53,974,452 shares of common stock outstanding on June 30, 2013.
In other financings news:
• Agenus Inc., of Lexington, Mass., said it entered a definitive $6.5 million purchase agreement with institutional investors to sell an aggregate of 2, 166,667 shares of its common stock and warrants to purchase up to approximately 650,000 additional shares of its common stock. Each unit, consisting of one share of common stock and a warrant to purchase 0.3 of a share of common stock, will be sold for a purchase price of $3. The warrants to purchase additional shares will be exercisable at $3.75 per share beginning six months following issuance and will expire five years from the date on which the warrants are initially exercisable.
• Galena Biopharma Inc., of Portland, Ore., said it closed an underwritten public offering of 17.5 million shares of common stock, and warrants to purchase an aggregate of 6.125 million shares of common stock at an exercise price of $2.50 per share. The underwriters also exercised their overallotment option to purchase warrants to purchase an aggregate of 918,750 shares of common stock. The net proceeds are expected to be approximately $32.6 million.
• Oxygen Biotherapeutics Inc., of Morrisville, N.C., said it converted $4.6 million in outstanding principal of a convertible promissory note that was scheduled to mature July 1, 2014, and carried an annual interest rate of 15 percent. The move reduced the company’s debt from $4.9 million to $300,000. The debt was retired Aug. 24 in conjunction with a private placement of $4.6 million in shares of the company’s Series D 8 percent convertible preferred stock.
• Protalix Biotherapeutics Inc., of Carmiel, Israel, said it closed its offering of $69 million principal amount of its 4.5 percent convertible notes due 2018 through a private offering, including $9 million aggregate principal amount of notes related to the initial purchaser’s overallotment option, which was exercised in full.