Genta Incorporated (OTCBB: GETA) announced today that the Company has
entered into definitive agreements with institutional investors for a
private placement of Convertible Notes totaling $25 million in gross
proceeds. The transaction is expected to close on or about March 10,
2010, subject to the satisfaction of customary closing conditions.
Proceeds of the financing will be used to ensure adequate followup to
determine overall survival results from Genta’s recently completed Phase
3 trial of Genasense® (oblimersen sodium) Injection plus chemotherapy as
first-line treatment of patients with advanced melanoma (known as
AGENDA) and to accelerate development of the Company’s pipeline
products, among other uses.
“This financing provides sufficient funds for more than a year of our
expanded operations”
“This financing provides sufficient funds for more than a year of our
expanded operations”, said Dr. Raymond P. Warrell, Jr., Genta’s Chief
Executive Officer. “Evaluation of a potentially significant increase in
overall survival from AGENDA represents an especially high priority. We
are also initiating new Phase 2a and 2b clinical trials with tesetaxel
that will extend its position as the leading, development-stage, oral
taxane. Assuming these new trials confirm earlier results, we envision
that tesetaxel could enter Phase 3 pivotal trials in 2011. All of these
potentially transforming events are now enabled with the completion of
this transaction.”
Summary of Financial Terms
The $25 million of Convertible Notes issued pursuant to this transaction
have a 3-year term and will be initially convertible into shares of
Genta common stock at a conversion rate of 100,000 shares of common
stock for every $1,000.00 of principal that is converted. This
conversion rate is subject to adjustment under certain circumstances.
The Convertible Notes bear an annual interest rate of 12%, payable
semi-annually. The Company has the right to force conversion of the
Convertible Notes if the closing price of the Company’s common stock
equals or exceeds $0.25 for a 10-consecutive-trading-day period and
certain other conditions are met. The Company has also issued Warrants
to purchase up to $10 million of additional Convertible Notes. These
Warrants expire in the fall of 2011.