Shares of AEterna Zentaris (TSX:AEZ) are falling today after the company announced details of its proposed financing. The private placement will comprise 6.6 million units, with each unit consisting of one common share and 0.45 of a warrant.
The company is pricing the offering at (US) $2.50 per unit, a more than 20% discount to yesterday’s closing price of $3.09.
AEterna Zentaris says it will use the money to fund its ongoing drug development activities, including the development of perifosine in multiple myeloma and the advancement of its AEZS-108 and AEZS-130 programs, and for working capital.
The announcement comes days after the company consolidated its shares on a one-to-six basis to comply with Nasdaq marketplace rule 5450(a)(1), which says stocks listed on the exchange cannot trade below a dollar for more than thirty consecutive business days.
In April, shares of AEterna Zentaris tumbled after the company announced that its lead offering, Perifosine, failed to meet its primary endpoint. A trial involving 468 patients conducted by its North American licensee partner, Keryx Biopharmaceuticals, did not improve overall colorectal cancer survival rates versus a placebo.
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The news was a bitter pill to shareholders hoping Perifosine could take away the sting of notable disappointments, including cetrorelix, a prostate treatment that failed to meet its primary endpoint and led to the termination of its partnership with Paris based pharmaceutical giant Sanofi-Aventis.
AEterna Zentaris had trimmed its losses to just over $27-million in fiscal 2011, but its only source of revenue at present is non periodic milestone payments for Cetrotide, an in vitro fertilization drug that is currently the company’s only marketed product.
At press time, share of AEterna Zentaris on the TSX were down 23.5% to $2.34.