Seattle Genetics Reloads Cash Reserves With $155M, On Cusp of Selling First Drug
Seattle Genetics has raised a new load of cash to brace itself for a big year ahead, as it prepares to hire a lot of people and introduce its first drug on the U.S. market.
The Bothell, WA-based company (NASDAQ: SGEN) said today it has raised another $155 million through a stock sale. The company sold 10 million new shares at $15.50 apiece, and has granted its underwriters options to buy another 1.5 million shares over the next 30 days. Jefferies & Co., JP Morgan Securities, Leerink Swann, RBC Capital Markets, Needham & Co., William Blair & Co., Oppenheimer & Co., and ThinkEquity all helped manage the offering.
Seattle Genetics has been on a roll the past year seeing its stock rise more than 60 percent, and, not surprisingly, was able to command good terms. The company’s stock closed yesterday at $16.17, before it announced that it planned to sell more shares, essentially diluting the value of existing ones. Even so, Seattle Genetics was able to sell shares at just a 4 percent discount to yesterday’s closing price, which could mean many of the new investors will be motivated to hold on and wait for the shares to climb so they can see a bigger return.
The company hasn’t reported how much cash it had in the bank heading into 2011, but did say it had $315.6 million in cash as of September 30, it most recent date of record. Much of the money will go toward the commercial push for brentuximab vedotin (SGN-35). That’s the new “empowered antibody” that Seattle Genetics and its partner, Cambridge, MA-based Millennium: The Takeda Oncology Company, are developing for Hodgkin’s disease, anaplastic large cell lymphoma, and other related lymphomas with a common protein target called CD30. The drug showed unprecedented tumor shrinkage rates for patients in two pivotal trials last year, and now Seattle Genetics plans to seek FDA approval to start marketing the drug in the U.S.
Getting its first drug on the U.S. market after 13 years in business requires Seattle Genetics to hire a lot more people, with new skills in things like marketing and manufacturing, as CEO Clay Siegall explained in this feature last May. Siegall, in an interview in December, said the company expects to build a commercial team with 110 people by the end of 2011, which will be part of an overall company staff of about 475 to 500 people.