BiolineRX to raise NIS 40m

Although the drug development company has no immediate need of capital, delays in commercialization deals could cause shortages.

BiolineRX Ltd. (TASE:BLRX) today initiated an offering of stocks and warrants to raise NIS 40 million. The minimum price for the shares is NIS 3.80 per share, compared with today's opening price of NIS 3.70.

BiolineRX's share rose 2.6% today to NIS 3.80, giving a market cap of NIS 141 million.

BiolineRX will offer two warrants exercisable at NIS 6.08 per share through the end of 2011, for every three shares.

In September, BiolineRX announced that it had obtained good results in the Phase IIb clinical trial of its schizophrenia drug. The company has said that it hopes to sign a large commercialization deal for the drug, which the company claims meets patients' need not provided by any current drug on the market.

If and until such a deal is signed, it would presumably have a cash component, which would finance BiolineRX's current operations. The company says that it is also due a $10 million milestone payment by the first quarter of 2010 from a commercialization contract signed in 2008 for its cardiology drug.

BiolineRX had $19.6 million in cash at the end of November, which will suffice through the end of 2010, so it has no immediate need for capital. However, if the negotiations on a commercialization deal for the schizophrenia drug drag on, the company could face a cash shortage. Hence the current offering, even though no large-scale or expensive clinical trials are in the offing.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) owns 10.6% of BiolineRX, Pan Atlantic Investments Ltd. and Pan Atlantic Bank and Trust Ltd. owns 12.5%, and Pitango Venture Capital owns 5.3%.

Published by Globes [online], Israel business news - - on December 28, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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