Financial bind increases for Antex as it halts public offering

Underwriter is unable to meet sale time frame

February 28, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Antex Biologics Inc., a cash-strapped biopharmaceutical company in Gaithersburg, said yesterday that it canceled a public offering that would have raised more than $5 million - enough to keep it operating the rest of this year.

The underwriter, Roan/Meyers & Associates LLP, notified Antex that it could not complete the offering of stocks and warrants within the time frame that the company had anticipated, Antex said in a statement yesterday.

Antex, which has 12.4 million shares outstanding, had filed for the stock sale in October. Yesterday its shares fell 6 cents to 27 cents on the American Stock Exchange, putting the company's market value at $3.4 million.

The withdrawal of the public offering leaves the 12-year-old company in a financial bind. Antex's "existing cash position is insufficient to support its operations," the company stated.

At the end of its third quarter, which ended Sept. 30, Antex had approximately $1.2 million in cash - down significantly from the $8.9 million it had at the similar point in 2001. It reported a net loss of $2.2 million on revenue of $69,260 in the quarter. It has yet to report fourth-quarter results.

Antex said it is exploring other possible financing sources, including strategic alliances, additional equity or debt private placements, sale or leasing of assets, or merging or selling all or part of the company. It warned that if it is not successful in these efforts, "it will be required to curtail its ongoing operations or cease operations completely."

Antex makes vaccines that are in various stages of development, but it hasn't been able to generate steady revenue from its products. Antex has relied on equity financing and research and development alliances with major pharmaceutical companies and the U.S. government. The company employs about 35 people.

In July 2001, Antex raised $2.6 million in a private equity offering, and it may need to take that route again. The market for a public offering is "very challenging" right now, said Rene Salas, who heads Ernst & Young's mid-Atlantic life sciences practice.

"There's just not much of an appetite for public investment right now. There's a lot of uncertainty right now."

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