Proceeds will go to a combination of R&D expenses, capital expenditures, working capital, and potential acquisitions.
Idenix Pharmaceuticals plans to raise $51.268 million by selling 18.31 million shares of its common stock at a public offering price of $2.80 per share as well as $5 million in common stock to its largest shareholder. Novartis, in a separate private placement.
Proceeds will be used toward various purposes including R&D expenses related to Idenix’ nucleoside/nucleotide and other discovery programs, working capital, capital expenditures, and potential acquisitions of new businesses, technologies, or products that complement its business.
In releasing its fourth quarter and full-year 2010 results on Feb. 28, the company said it is “pursuing multiple follow-on and novel nucleoside/tide programs.” Idenix develops drugs for the treatment of human viral and other infectious diseases, building on expertise in nucleoside chemistry and other small molecule chemistry and biology. The company is now focused on the treatment of HCV infections, after previously discovering and developing antivirals for treating HBV and HIV/AIDS.
On the HIV/AIDS front, Idenix said last November it was receiving $20 million from ViiV Healthcare for achieving a clinical milestone relating to GSK2248761 (‘761), a compound ViiV is testing in a Phase IIb trial. But just three months later in February, ViiV told Idenix ‘761 was placed on clinical hold by the FDA. ViiV has full responsibility for the development of ‘761, including any regulatory interactions.
Novartis owns 43% of Idenix shares, according to the April 7 supplement to a prospectus filed October 17, 2008. Assuming the public offering is priced at $3.21 per share, the closing price for Idenix shares as of April 6, Novartis would purchase 1,557,632 shares in the private placement, the supplement stated.
Shares of Idenix closed at $3.24 per share Thursday, then dipped 26 cents a share in premarket trading, to $2.98 a share. Over the past year, the per-share price of Idenix has ranged from $2.57 to $6.11.
J.P. Morgan Securities LLC is acting as sole book-running manager and underwriter for the public offering. Idenix has granted J.P. Morgan Securities a 30-day option to purchase up to an additional 2,746,500 shares to cover over-allotments if any.