Boston, MA 05/27/2014 (wallstreetpr) – OXiGENE Inc (NASDAQ:OXGN) has announced plans to raise cash through equity offering. And as much as the move will help the company to improve its cash position, it is not the best of the news for the existing shareholders because it will inevitably result in value dilution. However, the long-term result is more important than the temporary impact of stock dilution.
The company intends to put the money into various projects that seek to enrich its product portfolio with the aim of attracting more and bigger revenue in the future. As such, in spite for the eminent dilution, shareholders need not worry because the company’s long-term goal is justifiable. Furthermore, equity offering is by far cheaper than debt issuance that typically leads to financial hiccups.
Improving cash position
The drug company OXiGENE Inc (NASDAQ:OXGN) intends to raise about $16 million in common stock offering and it has already entered a definitive agreement with an institutional buyer. The buyer will purchase the shares at $2.9625 per share with an option to purchase unregistered warrants at the price of $2.90 per share. The warrants expire after five years and three months.
The offering of common stock shares is expected to close on May 28, but subject to various customary closing conditions. OXiGENE Inc (NASDAQ:OXGN) has tapped H.C. Wainwright & Co to be the exclusive placement agent in the offer.
If the offering is completed successfully, OXiGENE will significantly bolster its cash position of $24.7 million as of March 31, 2014.
Advancing portfolio
As already mentioned, OXiGENE Inc (NASDAQ:OXGN) seeks to advance its product portfolio and research activities. The finances will support that objective as the company seeks to drive value for the shareholders in the cancer treatment market where most of its research activities are focused.
Change of guard
The equity offering comes at a time when OXiGENE Inc (NASDAQ:OXGN) witnessed a change of guard in its top leadership. Mr. David Chaplin, 58, was named the CEO of the drug company after the unexplained departure of Peter Langecker.
Shares of OXiGENE Inc (NASDAQ:OXGN) are up almost 8 percent year-to-date.
