EntreMed files to sell $50 million in securities

Drug company has enough cash for rest of year, analyst says

May 11, 2002|By Julie Bell | Julie Bell,SUN STAFF

EntreMed Inc. said yesterday that it had filed a registration statement with the Securities and Exchange Commission to sell $50 million in securities.

The "shelf registration" filing allows the Rockville drug developer to prepare to sell common stock, preferred stock or warrants to purchase securities.

After the SEC declares the registration effective, EntreMed can sell a portion of the securities from time to time, leaving the rest "on the shelf" for later.

"They're just making sure it's available so they can go to market opportunistically," said Peter J. McDonald, an analyst with Gerard Klauer Mattison.

McDonald estimated that EntreMed had $46 million in cash as of Feb. 1 after a December private stock placement and a January licensing deal with Allergan Inc. The $46 million, he said, is "enough to get them through the year, essentially."

McDonald said the Allergan deal, which could be worth up to $41 million, plus royalties to EntreMed, brought it $5 million in cash immediately.

Allergan, based in Irvine, Calif., gained the rights to use EntreMed's drug Panzem to treat diseases of the eye. It will first try to develop the drug as an implantable treatment for age-related macular degeneration.

EntreMed said in its release yesterday that it "has no immediate plans to issue any securities, but believes that it should be in a position to take timely advantage of market opportunities."

EntreMed has three drugs - Endostatin, Angiostatin and Panzem - in clinical trials for the treatment of cancer.

Shares of the company lost 4 cents yesterday to close at $7.51.

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