NEW YORK, Sept. 17 (GenomeWeb News) -- Los Angeles-based CytRx today announced the completion of an $8.7 million private placement of its common stock.
The company, which trades its stock on the Nasdaq small cap exchange, said it sold 4.1 million shares to selected institutional investors, including current shareholders. Additionally, the company, which engages in biotechnology and drug-delivery, issued warrants for the purchase of an additional 1 million shares at an exercise price of $3.05 per share, and will register all of the privately placed shares for resale. The stock closed at $2.60 on Monday.
CytRx said it will use $7 million of the private-placement financing to expand its RNAi-based research and development efforts in obesity and type II diabetes, which it is conducting in collaboration with the University of Massachusetts Medical School. The company will create Araios, a fully-staffed operating subsidiary to develop an orally active drug for the treatment of the two conditions. Michael Czech, chairman of the department of molecular medicine at the University of Massachusetts, will serve as scientific advisor for the subsidiary.