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Genaissance Gets $11M Infusion
Biotech buoyed by stock sale, loan
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Business New Haven
11/10/2003
By: BNH
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NEW HAVEN - Genaissance Pharmaceuticals has received an $11.1 million cash infusion from two companies, with potential for attracting an additional $4.3 million investment.
The biotech firm said that RAM Trading Ltd., an affiliate of an existing investor, has purchased 270,000 chares of preferred stock at $22.50 a share, for a total purchase of about $6.1 million.
The preferred stock pays an annual cash dividend, and the company can at any time convert those shares into 2.7 million shares of common.
RAM also received a warrant to buy an additional 190,000 shares of preferred stock under the same terms until December 31, 2005, netting an additional $4.3 million.
In September, Genaissance received a $5 million loan from Comerica Bank. The proceeds were used to pay for capital leases and to reduce the company's annual principal and interest payments.
"This funding completes the restructuring plan for our balance sheet, which we began last year, and further helps position us financially to execute our business plan of building the preeminent pharmacogenetics company," said Kevin Rakin, Genaissance's president and chief executive. "We are extremely pleased by the additional support from an affiliate of one of our significant shareholders, which we believe is a tangible expression of confidence in our business."
The Science Park-based Genaissance is involved in the discovery and use of human gene variation for the development of a new generation of DNA-based diagnostic and therapeutic products. The company markets its technology, clinical development skills and pharmacogenetic services mainly to the pharmaceutical industry. Genaissance has agreements with major pharmaceutical, diagnostic and biotechnology companies.
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