DARA BioSciences Announces Registered Direct Offering of $2.55 Million
RALEIGH, NC -- (Marketwired) -- 10/22/13 -- DARA BioSciences, Inc.
(NASDAQ: DARA), an oncology supportive care pharmaceutical company
dedicated to providing health care professionals a synergistic
portfolio of medicines to help cancer patients adhere to therapy and
manage side effects arising from cancer treatment, today announced
that on October 22, 2013, DARA BioSciences, Inc. (the "Company")
entered into a Securities Purchase Agreement (the "Purchase
Agreement") with certain institutional investors providing for the
issuance and sale by the Company in a registered direct offering of
5,100,000 shares (the "Shares") of the Company's common stock, par
value $0.01 per share, at an offering price of $0.50 per share (the
"Share Offering") for gross proceeds of $2,550,000 before deducting
for placement agent fees and expenses. The Shares are being offered
by the Company pursuant to an effective shelf registration statement
on Form S-3, which was initially filed with the Securities and
Exchange Commission on March 25, 2011 and declared effective on April
19, 2011. A preliminary prospectus supplement and the accompanying
prospectus relating to the Share Offering has been filed with the
SEC, and a final prospectus supplement relating to the Share Offering
will be filed with the SEC and will be available at the SEC's website
located at www.sec.gov.
In a concurrent private placement (the "Private Placement" and,
together with the Share Offering, the "Offerings"), the Company is
selling to purchasers of shares of its common stock in the Share
Offering a warrant to purchase one share of our common stock for each
share purchased in the Share Offering (collectively, the "Warrants").
Each Warrant will become exercisable six months after issuance (the
"Initial Exercise Date"), will have an exercise price of $0.56 per
share and will be exercisable for five years following the Initial
The Warrants and the shares of the Company's common stock issuable
upon the exercise of the Warrants are not being registered under the
Securities Act, are not being offered pursuant to the Registration
Statement and are being offered pursuant to the exemption provided in
Section 4(a)(2) under the Securi
ties Act of 1933 (the "Securities
Act"), and Rule 506(c) promulgated thereunder.
The closing of the Offerings is expected to take place on or about
October 25, 2013, subject to customary closing conditions.
The Company estimates that the net proceeds from the Offerings will
be approximately $2.3 million. The net proceeds received by the
Company from the Offerings will be used to fund its obligations under
certain agreements as described below.
The Company intends to enter into a Master Service Agreement (the
"CSO Agreement"), with Alamo Pharma Services, Inc. ("Alamo"),
following the closing of the Offerings, pursuant to which Alamo will
provide the Company with a dedicated sales force for the promotion of
the Company's products, Soltamox, Gelcair, Bionect, and certain
complementary products of Mission Pharmacal Company ("Mission").
Alamo is a wholly owned subsidiary of Mission. Concurrent with the
CSO Agreement, the Company also intends to enter into a related sales
representative sharing agreement and a co-promotion agreement
(together with the CSO Agreement, the "Agreements") with Mission and
Alamo, whereby the Company will share the costs and expenses of the
sales force with Mission. Initially, the sales force will consist of
20 individuals. Alamo will be responsible for the hiring, training,
and compensation of the sales force and will provide certain sales
support in connection therewith. The Company will be responsible for
the management of the sales force. Under the terms of the Agreements,
the Company will pay Alamo a fixed monthly fee, subject to an annual
escalator, and reimburse Alamo for certain expenses and will receive
compensation from Mission for promoting their products. The
Agreements will have a term of three years, subject to automatic
one-year renewals unless either party provides at least 60 days'
written notice of termination prior to the end of the relevant term.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann
Financial Services Inc., acted as the sole placement agent in
connection with the offering.
About DARA BioSciences, Inc.
DARA BioSciences Inc. is an oncology supportive care pharmaceutical
company dedicated to providing healthcare professionals a synergistic
portfolio of medicines to help cancer patients adhere to their
therapy and manage side effects arising from their cancer treatments.
DARA holds exclusive U.S. marketing rights to Soltamox (tamoxifen
citrate) oral solution, the only liquid form of tamoxifen, used for
the treatment and prevention of breast cancer. Soltamox offers a
choice to patients who prefer or need a liquid form of tamoxifen.
Gelclair is an alcohol-free bioadherent oral rinse gel for rapid and
effective relief of pain associated with oral mucositis caused by
chemotherapy and radiation treatment. DARA licensed the U.S. rights
to Soltamox from UK-based Rosemont Pharmaceuticals, Ltd., and
Gelclair from the Helsinn Group in Switzerland. Under an agreement
with Innocutis, DARA also markets Bionect (hyaluronic acid sodium
salt, 0.2%) a topical treatment for skin irritation and burns
associated with radiation therapy, in US oncology/radiology markets.
DARA is focused on expanding its portfolio of oncology supportive
care products in the US, via in-licensing and/or partnering of
complementary late-stage and approved products. In addition, the
company wishes to identify a strategic partner for the clinical
development of KRN5500, currently in Phase 2 for the treatment of
chronic, treatment refractory, chemotherapy induced peripheral
neuropathy (CCIPN). The FDA has designated KRN5500 as a Fast Track
Drug, and DARA is seeking orphan status for the treatment of CCIPN.
Safe Harbor Statement
All statements in this news release that are not historical are
forward-looking statements within the meaning of the Securities
Exchange Act of 1934, as amended. Such forward-looking statements are
subject to factors that could cause actual results to differ
materially for DARA from those projected. Important factors that
could cause actual results to differ materially from the expectations
described in these forward-looking statements are set forth under the
caption "Risk Factors" in DARA's most recent Annual Report on Form
10-K, filed with the SEC on March 28, 2013. Those factors include
risks and uncertainties relating to DARA's ability to timely
commercialize and generate revenues or profits from BionectÂ®,
SoltamoxÂ®, GelclairÂ® or other products given that DARA only recently
hired its initial sales force and DARA's lack of history as a
revenue-generating company, FDA and other regulatory risks relating
to DARA's ability to market Bionect, Soltamox, Gelclair or other
products in the U.S. or elsewhere, DARA's ability to in-license
and/or partner products, DARA's current cash position and its need to
raise additional capital in order to be able to continue to fund its
operations, the current regulatory environment in which DARA sells
its products, the market acceptance of those products, dependence on
partners, successful performance under collaborative and other
commercial agreements, competition, the strength of DARA's
intellectual property and the intellectual property of others, the
potential delisting of DARA's co
mmon stock from the NASDAQ Capital
Market, risks and uncertainties relating to DARA's ability to
successfully integrate Oncogenerix and other risk factors identified
in the documents DARA has filed, or will file, with the Securities
and Exchange Commission ("SEC"). Copies of DARA's filings with the
SEC may be obtained from the SEC Internet site at http://www.sec.gov.
DARA expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in DARA's expectations with
regard thereto or any change in events, conditions, or circumstances
on which any such statements are based. DARA BioSciences and the DARA
logo are trademarks of DARA BioSciences, Inc.
David Connolly or Samantha Stenbeck
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