NEW YORK (GenomeWeb News) – Vancouver, BC-based molecular diagnostics firm Response Biomedical today announced the signing of a subscription agreement for the sale of C$8 million ($7.7 million) of its common shares to investment company OrbiMed Advisor's affiliated Asia fund.
Pursuant to the agreement, Response Biomedical will issue an aggregate of 13.3 million common shares at C$0.60 per share. Net proceeds from the placement will be used for general operating expenses, Response Biomedical said in a statement.
The company has also agreed to nominate two representatives from OrbiMed to serve on its board, provided that OrbiMed and its affiliates continue to hold at least 5.8 million shares of Response Biomedical's stock.
A shareholders' meeting is scheduled for July 27 to vote on the deal.
Wayne Kay, CEO of Response Biomedical, said that the participation of OrbiMed's affiliated Asia fund "is indicative of our expanding growth in the China market."
Under an agreement announced earlier this year, Guangzhou Wondfor Biotech will be selling Response Biomedical diagnostic products in China, building on an earlier deal with O&D Biotech for distribution of its products in the region.
"With our growing revenues, this funding will allow us to concentrate on accomplishing our operational goals as we move toward becoming cash flow positive," Kay added.