Jazz Pharmaceuticals may have more to plow into its drug candidate (JAZZ)
Jazz Pharmaceuticals Inc. (Nasdaq: JAZZ) shares are up more than 26 percent to $4.62 on volume of more than 500,000 shares in the first hour of trading after the company said it has paid its senior secured noteholders interest payments that had been due them, following a private placement that eases its cash crunch.
The company announced it has closed a private placement of about 1.9 million common shares, and warrants to buy about 950,000 additional shares, generating proceeds of about $7 million. The per-unit purchase price for the stock and a warrant with an exercise price of $4 was about $3.69.
The company also said it has cured all material debt defaults.
Last month, Jazz Pharmaceuticals (Nasdaq: JAZZ) said it planned to halt development of three drug candidates in an effort to preserve much-needed cash. As of its most recent filing, the company had about $17 million in cash on hand, but at that time it had yet to make its fourth-quarter interest payments on about $19.5 million of its senior secured notes.
The company does plan to continue developing its Phase 2 experimental drug to treat fibromyalgia. The easing of its cash crunch may mean the company has more funding to plow into its drug candidate. — Mike Tarsala