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UPDATE: Cytogen Sets Up $70M Credit Line to Support Research

This story has been updated from a previous version.

NEW YORK, Oct 10 - Biopharmaceutical company Cytogen announced Tuesday that it had reached a deal with Acqua Wellington North American Equities Fund for an equity financing facility of up to $70 million.

“This is a line of credit that we can use at our discretion,” said Richard Krawiec, head of investor relations and corporate communications at Cytogen. “In the future we can put stock to them and they have to buy it.”

Krawiec said that Acqua Wellington would receive a discount on the stock, but he declined to be specific about the size of the discount.

Krawiec said the company had established the line of credit in order to make funds available to acquire new products, to accelerate activity at its AxCell subsidiary, a company that is developing a protein pathway database, and to finance clinical trials of its vaccine for prostate cancer.

The company expects to begin clinical trials of the vaccine early next year.

Cytogen of Princeton, NJ currently has 76 million shares outstanding, which does not include the three million shares it has made available for sale via a shelf registration in the spring. If the company decides to sell more than three million shares to Acqua Wellington or to another investor it would have to register to do so.

Recently, Cytogen received $6 million in net proceeds from an equity placement of 902,601 shares of registered common stock with Acqua Wellington. Based on those figures, Acqua Wellington paid $6.65 a share.

Shares of Cytogen, which have been falling since September, were up 7/32, or 3.9 percent, at 5 7/8 in afternoon trading on the Nasdaq.

Acqua Wellington Asset Management is the advisor to the Acqua Wellington Family of Funds, which focus on the technology and life science sectors.  

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