Monday, October 6, 2008

Oscient market cap drops; Nasdaq warns

Oscient Pharmaceuticals Corp. received a warning letter from the Nasdaq Stock Market that the biotech company’s market value dropped below $15 million for 10 days straight, failing to meet the exchange’s minimum eligibility requirement for market listing.

Nasdaq has stated that if Waltham-based Oscient (Nasdaq: OSCI) fails to regain the exchange’s minimum listing requirement by January 2009, it will be in danger of a pending delistment.

Nasdaq defines a company’s market value by taking all the common shares of officers, directors and owners who own 10 percent or more of total shares and subtracting that from the company’s total share value.

On Sept. 10, Oscient stated it was attempting to make improvements in its stock structure in through a proposed exchange offer with shareholders of convertible senior notes coming due 2011. The offer consists of each $1,000 worth of the 3.5 percent convertible senior notes due 2011 to be exchanged for $300 principal amount of new 12.5 percent convertible senior notes due 2011, in addition to company common stock worth about $200.

In total, Oscient common stock offerings related to the exchange tally up to $225.7 million in principal — an amount equal to the current outstanding convertible senior notes. The aggregate principal amount of the new 12.5 percent convertible senior notes due 2011 add up to $67.7 million.

Oscient develops pharmaceutical drugs for the treatment of high blood cholesterol and high triglycerides, as well as treatment for chronic bronchitis and pneumonia. For 2007, the company reported a net loss of $29.8 million on total revenue of $80 million.