NexMed Inc. grossed $10.5 million through a private placement of about 2.9 million shares priced at $3.60 each.

The per-share cost represented about a 12.5 percent discount to the $4.19 closing bid price on Wednesday, when the deal closed. Robbinsville, N.J.-based NexMed, which develops products based on its NexACT transdermal drug delivery technology, said the price was based on the average of the daily volume-weighted average sales prices for the seven trading days immediately preceding the closing. Its shares (NASDAQ:NEXM) closed unchanged Monday at $4.

The investors, a syndicate of 12 institutional and accredited investors including The Tailwind Fund, MidSummer Capital and Viking Global Investors, also received four-year warrants to purchase about a million common shares at $5.04 apiece - a 22.5 percent premium to the market price. One-third of the warrants would be callable by the company if the stock closes above $10 for seven consecutive trading days.

NexMed, which reported cash, cash equivalents and short-term securities totaling $205,000 through March 31, said it would use the proceeds for general corporate purposes and to further its NexACT-based product development programs. On April 22, the company completed an $8 million private placement of its securities.

NexMed lost about $3.5 million for the quarter ended March 31, at which point it reported 28.6 million shares outstanding.

Recent data from two pivotal studies of its lead candidate, Alprox-TD, showed that all three dose levels of the product achieved a statistically significant improvement in erectile function as measured by three primary efficacy endpoints. NexMed's pipeline also includes Femprox, for female sexual arousal disorder.