OK, so MRVT huge news, gap up in AM..I hope some of you bought
Miravant close to $75 million
from Pharmacia & Upjohn
By Thom Calandra, CBS MarketWatch
Last Update: 4:24 PM ET Nov 3, 1998
SAN FRANCISCO (CBS.MW) -- California
biotechnology developer Miravant
Medical Technologies could soon unveil a $75
million package of stock, cash
and credit from supportive drug company
Pharmacia & Upjohn, a source close
to the company says.
Miravant (MRVT) of Santa Barbara develops
photo-selective drugs and devices
to combat cancer and age-related macular
degeneration, the leading cause of
vision loss in the elderly.
The money-losing company, its shares under
siege, already has a vote of
confidence from Pharmacia & Upjohn (PNU), which
just announced a $1 billion
stock buyback of its own stock. Pharmacia is
funding a clinical study of
Purlytin, the Photopoint drug that would be used
to treat macular degeneration.
PhotoPoint uses non-thermal light to destroy
diseased tissue in eyes.
The U.S. Food & Drug Administration has granted
Purlytin so-called "fast-track"
status that could speed the agency's review of
the drug as more data come in.
One investment professional close to Miravant
says the company soon will
unveil a Pharmacia & Upjohn plan that would
allow the international drug
company to buy 1 million shares of Miravant
stock at $20 each. The shares sell
for 14, down from 57 1/2 exactly one year ago.
(Note: On Tuesday, after this
column appeared, the stock rose 2 9/16 to 16
7/16.)
Pharmacia also would spend $35 million to pay
off investors in a private
placement, says the source, who asked to remain
unnamed. The placement
raised about $50 million for Miravant when the
company's shares sold for about
50 each. Such a Pharmacia payment would reduce
the number of new shares
Miravant has to issue to private investors, who
as lenders to the company get
more stock as the price of the shares fall.
Pharmacia also would provide a $20 million
credit line, perhaps linked to its
already stated agreement to pay out-of-pocket
expenses for clinical studies.
Miravant spokesman Tom Herrick told me the
company is close to an
announcement about Purlytin. "We are announcing
our Phase III trials in the
very near future," Herrick said. Phase III
trials are the last stage of human tests
on developing drugs before FDA review.
Herrick said Pharmacia already holds about 4
percent of Miravant's 14.1 million
common shares. "Unfortunately, our position is
not to comment on rumors or
speculation," he said.
"We would only be able to announce that (news of
a fuller relationship with a
drug company) in the form of a press release,"
Herrick said.
Miravant CEO Gary S. Kledzik in September
suffered a snafu of sorts. He
inadvertently sold 50,000 shares of stock in an
independently managed
account, then went out and purchased 50,000
shares at higher prices. Kledzik
says he had never sold any Miravant shares in
his nine years with the company.
Miravant's board on Tuesday named William P.
Foley II, CEO of Fidelity
National Financial (FNF) and CKE Restaurants
(CKR), as a director.
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