Thursday, March 27, 2008

Novelos nabs $5M from equities sale

Novelos Therapeutics Inc. has struck a deal to raise $5 million in a private placement of stock with its existing investors, according to the biotech firm.

Newton-based Novelos (OTCBB: NVLT) said it has agreed to sell 100 shares of Series D preferred stock valued at $50,000 per share, with an annual dividend of 9 percent and a conversion price of 65 cents per share for the firm's common stock. Novelos will also issue warrants to investors for the purchase of more than 3.8 million shares of its common stock for 65 cents per share.

The deal is expected to close within two weeks, Novelos said.

Investors involved in the deal include Xmark Opportunity Funds of Stamford, Conn.; OrbiMed Advisors and Knoll Capital, both of New York; and Hunt BioVentures in Dallas, according to Novelos.

Novelos, a developer of treatments for cancer and hepatitis, reported a 2006 net loss of $8.3 million with no revenue. The firm has seven employees.