NEW YORK, June 6 - Orchid Biosciences said Wednesday it planned to sell $33.3 million worth of common stock to a number of private investors as part of an effort to shore up its cash reserves and launch new products.
As of March 31, Orchid had $50.8 million in cash and cash equivalents, down from $66.4 million at the end of 2000. Fears that Orchid did not have enough cash weighed on the share price, which closed at $6.44 on Tuesday, down from a 52-week high of $61 reached last July, said Barbara Lindheim, Orchid's vice president for strategic communications.
"Our cash position was OK -- we had money for at least a year," Lindheim told GenomeWeb. "But there was a lot of concern on the street that a year's worth of cash was not enough."
Robertson Stephens, the placement agent for the offering, has received commitments to sell 5.55 million shares at $6 a share to a group of existing and new investors. Lindheim said the company may be able to sell an additional 450,000 shares, which would bring the total placement to $36 million.
Lindheim said the Princeton, NJ-based company did not raise money to make new acquisitions, but rather to help launch several new SNP genotyping products, and pursue partnerships with laboratory equipment manufacturers to install its SNP genotyping technology on their platforms. Orchid already has similar arrangements with Applied Biosystems, Amersham Pharmacia Biotech, and Perkin Elmer Bioscience, Lindheim said.
In February, Orchid acquired Cellmark Diagnostics, which had been AstraZeneca's UK genetic testing subsidiary. Prior to that Orchid had acquired GeneScreen, a DNA- and SNP-analysis company, in January 2000, and Molecular Tool in 1998.
The company's share price was up 33 cents, or 5.1 percent, at $6.77 in morning trading on Wednesday.