NEW YORK (GenomeWeb News) — Transgenomic earlier this month said it hoped to pocket $937,500 in a private stock placement scheduled to close in February.
The company, which has been beset by financial challenges in recent months, said it would sell 250,000 shares of common stock of a company called Pinnacle Pharmaceuticals to New River Pharmaceuticals for $3.75 per share less certain liabilities, according to a Securities and Exchange Commission filing last week.
Transgenomic expects the sale to close by Feb. 28, 2007, and said that proceeds — around $937,500 — will be used for general working capital purposes.
Transgenomic said in the SEC filing that there are “no relationships” between itself and New River. It said New River is buying the shares because it is acquiring all of Pinnacle’s 580,000 outstanding common shares and 500,000 of its preferred stock.
News of the potential windfall comes as Tansgenomic looks for ways to improve its performance. Most recently, during its third-quarter financial report disclosed in November, Transgenomic said it had hired Thomas Weisel Partners to help it figure out how to “maximize shareholder value” in the short- and long-term.
At the time, Transgenomic said revenues for the three months ended Sept. 30 decreased 26 percent as R&D spending rose 15 percent and income swung to a loss.
"We were very disappointed in our sales," CEO and President Craig Tuttle said at the time.
Transgenomic shares have lost more than half their value since the beginning of 2006. They closed up last Firday at $.46