Evidently, CEGE does not feel cash is trash. I thought they'd use their own hoard for this, but no:
>>FOSTER CITY, Calif., Jan. 3 /PRNewswire/ -- Cell Genesys, Inc. (Nasdaq: CEGE - news) today announced the completion of a $60 million asset-backed debt financing in connection with the construction of the company's manufacturing facility in Hayward, CA, which is scheduled for completion prior to the initiation of Phase III trials later this year. The loan, which is being provided by Fleet Bank of Boston, MA, will have an interest rate of LIBOR (London InterBank Offering Rate) plus one percent and a term of six years. Cell Genesys will pay interest only for the first year, followed by quarterly payments and an approximately 30 percent balloon payment at the end of the six-year period.
``Debt financings in the current interest rate environment are a very attractive financing option for companies at our stage making significant investments in product development and manufacturing infrastructure,'' stated Matthew J. Pfeffer, vice president and chief financial officer of Cell Genesys. ``This $60 million financing will not only add significantly to our strong cash position of over $200 million but will also give us added flexibility in our long term financing strategy. As we have previously indicated, this strategy will continue to focus on the periodic sale of portions of our equity interest in Abgenix, Inc., a former subsidiary of Cell Genesys.''
Cell Genesys has established a leadership position in manufacturing capabilities for both cell and viral-based gene therapy products. The company currently has a 48,000 square-foot GMP (Good Manufacturing Practices) manufacturing facility on-line in San Diego, CA and expects the Hayward GMP manufacturing facility, which will be 41,000 square feet, to be operational during the latter half of this year. Both facilities are designed to manufacture product for Phase III clinical trials as well as market launch. Cell-based products, such as the company's GVAX® cancer vaccines, will be manufactured in the Hayward facility, while viral-based products such as the company's oncolytic virus therapies and gene therapies are being manufactured in the San Diego manufacturing facility. The new Hayward facility is expected to cost approximately $60 million of which approximately $20 million was spent during 2001.<<
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So what are they going to do with it all?
Cheers, Tuck |
