Biotech Values

[DewDiligence]

ACHN raises $50M in PIPE from Domain Associates, Clarus Ventures, Quaker BioVentures, and Pappas Ventures:

http://sec.gov/Archives/edgar/data/1070336/000119312510193288/d8k.htm

The offering is for 19.8M units where each unit consists of one share and 0.35 warrants. The increase in fully-diluted shares is thus (19.8)(1.35) = 26.7M, which is roughly a 65% expansion in the fully-diluted share count.

The per-unit price is $2.615/sh. The 6.9M warrants are exercisable at $3.11 for a period of seven years. If all of the warrants are exercised, the warrants will produce an additional $21.6M in cash for ACHN and the effective result of the PIPE will be to raise $71.6M at an average share price of $2.68.

Adding the $50M PIPE proceeds (excluding potential warrant exercises) to ACHN’s 6/30/10 cash balance of $19.5M, ACHN now has $69.5M less whatever it has burned during 3Q10 to date.

Claris and Pappas already had seats on ACHN’s BoD, and Domain is contractually entitled to obtain one seat on the BoD as a result of this PIPE.