Washington Editor

MiddleBrook Pharmaceuticals Inc. is raising $21 million in a private placement of stock and warrants.

The Germantown, Md.-based firm said it has agreed to sell about 8.75 million shares of its common stock priced at $2.40 per share, along with five-year warrants to purchase an additional 3.5 million shares with an exercise price of $3 per share.

MiddleBrook said it intends to use the proceeds to support the manufacturing costs of Moxatag, its once-daily amoxicillin product, which received FDA approval Jan. 23. (See BioWorld Today, Jan. 25, 2007.)

Moxatag 775 mg is indicated as an anti-infective treatment for pharyngitis or tonsillitis secondary to Streptococcus pyogenes, commonly called strep throat. The drug is the first product approved for MiddleBrook, which also is developing a once-daily formulation of the anti-infective cephalexin.

The company currently markets Keflex, a cephalexin product the firm acquired in June 2004 from Indianapolis-based Eli Lilly and Co.

The funds also will go toward working capital and general corporate purposes, the firm added.

"We believe the proceeds from this financing will provide sufficient capital to operate our business in 2008 and afford the company greater flexibility and leverage as we seek to complete a strategic transaction over the coming months," said MiddleBrook CEO Edward M. Rudnic.

New York-based Rodman & Renshaw LLC served as the exclusive placement agent for MiddleBrook's financing, which will supplement the $5.9 million in unrestricted cash, equivalents and marketable securities the company reported as of Sept. 30.

While MiddleBrook's stock (NASDAQ:MBRK) jumped 139.2 percent Thursday, it was down 8 percent Friday, or 24 cents, to close at $2.75.

In other financings news:

• Rigel Pharmaceuticals Inc., of South San Francisco, said it will offer 4 million shares of common stock pursuant to an automatically effective shelf registration statement on file with the Securities and Exchange Commission. The stock offering has not been priced. Rigel said underwriters will be granted an overallotment option to buy 600,000 additional shares. Credit Suisse Securities LLC will be the sole bookrunner for the offering, with Thomas Weisel Partners LLC, Jefferies & Company Inc. and Oppenheimer & Co. Inc. acting as co-managers. The firm had about 31 million shares of stock outstanding as of Sept. 30. Shares of Rigel (NASDAQ:RIGL) were down 1.4 percent Friday, or 35 cents, to close at 25.54.