US-based RegeneRx Biopharmaceuticals has entered into a purchase agreement with an affiliate of the company’s largest stockholder, Sigma-Tau Group, with respect to the sale of 1.05 million shares of the company’s common stock at a price per share of $0.57, for gross proceeds of $600,000.
The offering is subject to customary closing conditions and the company expects to complete the transaction by April 18, 2009. In connection with the offering, the company has agreed to issue to the purchaser warrants to purchase an additional 263,158 shares of its common stock at an exercise price of $0.91 per share.
RegeneRx has also implemented a cost reduction program, including a 35% reduction in salaries of substantially all executives and staff. In return, the employees participating in the salary reduction have received, in the aggregate, options to purchase 698,138 shares of RegeneRx common stock at a price of $0.57 per share, one-third of which vest at the end of each remaining calendar quarter during 2009.
The company’s board of directors also approved a 35% reduction in compensation of non-employee directors. In return, the company’s non-employee directors have received, in the aggregate, options to purchase 64,157 shares of RegeneRx common stock at a price of $0.57 per share, which also vest at the end of each remaining calendar quarter during 2009.
JJ Finkelstein, RegeneRx’s president and CEO, said: Our cost cutting measures, along with our existing capital and proceeds from the offering, should be sufficient to allow us to continue our current operations into early 2010.
We are, therefore, continuing our ongoing Phase II clinical trial of RGN-137 in patients with Epidermolysis Bullosa, pursuing strategic partnering and financing opportunities, and further development of commercial opportunities in the cosmeceutical industry, which we hope will help us generate revenues in 2010.