NEW YORK (Reuters Health) - To raise funds for the anticipated launch of its lead product candidate, ViroPharma said on Thursday that it has sold 4 million shares of common stock to Morgan Stanley, generating $82.8 million before offering expenses.
Morgan Stanley, the sole underwriter of the offering, plans to offer the shares from time to time for sale in negotiated transactions or otherwise, at varying prices to be determined at the time of each sale, ViroPharma said.
Proceeds of the sale will largely be used to fund premarketing and manufacturing activities for Picovir (pleconaril), an investigational oral treatment for the common cold currently under review by US regulators.
Pursuant to a September agreement, Aventis Pharmaceuticals will market the drug in the US. As part of that agreement, ViroPharma will begin co-marketing two undisclosed Aventis drugs to US primary-care physicians in January 2002.
ViroPharma CFO Vincent Milano told Reuters Health that part of the proceeds of the offering will be used to hire 200 sales representatives to support that co-promotion program. He stressed that there would be considerable overlap between the physicians targeted for Picovir and those for the two co-promoted drugs.
ViroPharma also plans to use the funds from the offering to conduct phase IV trials of Picovir, to advance its hepatitis C and respiratory syncytial virus clinical programs, for capital expenditures, debt service, potential acquisitions and general working capital.
Following news of the stock sale, shares of Exton, Pennsylvania-based ViroPharma dropped 10% on Thursday. Its shares closed down 2.39 at 21.35 on the NASDAQ.
Morgan Stanley Dean Witter analyst Dr. Douglas Lind attributed the drop to the market adjusting itself to the roughly $21.30-per-share price of the offering. "It'll trade at that level until all of the stock is distributed," he told Reuters Health.
Dr. Ron Spangler, an analyst with Emerging Growth Equities, cited investor worries of dilution as the cause of the decline. "The fact that you've got 4 million shares that are going to hit the market at a price as yet unknown has got people concerned."
And with more stock still on the shelf, "that just adds to the uncertainty in the stock right now," Spangler told Reuters Health. In early July, ViroPharma said it had filed a shelf registration statement to sell up to $300 million worth of stock.
-New York Newsroom 212 273 1700
Morgan Stanley, the sole underwriter of the offering, plans to offer the shares from time to time for sale in negotiated transactions or otherwise, at varying prices to be determined at the time of each sale, ViroPharma said.
Proceeds of the sale will largely be used to fund premarketing and manufacturing activities for Picovir (pleconaril), an investigational oral treatment for the common cold currently under review by US regulators.
Pursuant to a September agreement, Aventis Pharmaceuticals will market the drug in the US. As part of that agreement, ViroPharma will begin co-marketing two undisclosed Aventis drugs to US primary-care physicians in January 2002.
ViroPharma CFO Vincent Milano told Reuters Health that part of the proceeds of the offering will be used to hire 200 sales representatives to support that co-promotion program. He stressed that there would be considerable overlap between the physicians targeted for Picovir and those for the two co-promoted drugs.
ViroPharma also plans to use the funds from the offering to conduct phase IV trials of Picovir, to advance its hepatitis C and respiratory syncytial virus clinical programs, for capital expenditures, debt service, potential acquisitions and general working capital.
Following news of the stock sale, shares of Exton, Pennsylvania-based ViroPharma dropped 10% on Thursday. Its shares closed down 2.39 at 21.35 on the NASDAQ.
Morgan Stanley Dean Witter analyst Dr. Douglas Lind attributed the drop to the market adjusting itself to the roughly $21.30-per-share price of the offering. "It'll trade at that level until all of the stock is distributed," he told Reuters Health.
Dr. Ron Spangler, an analyst with Emerging Growth Equities, cited investor worries of dilution as the cause of the decline. "The fact that you've got 4 million shares that are going to hit the market at a price as yet unknown has got people concerned."
And with more stock still on the shelf, "that just adds to the uncertainty in the stock right now," Spangler told Reuters Health. In early July, ViroPharma said it had filed a shelf registration statement to sell up to $300 million worth of stock.
-New York Newsroom 212 273 1700