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Cell Genesys Hit on Placement

It raises $60 million but sees its shares drop 9%.
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Cell Genesys (CEGE) dropped 9% after the biotech set plans to raise $60 million in a private placement of stock and warrants.

The South San Francisco, Calif., company said unnamed buyers will get 10.8 million shares and warrants to buy 2.2 million more shares. Credit Suisse Securities is lead placement agent and Needham, Canaccord Adams and Cantor Fitzgerald are co-placement agents.

Cell Genesys intends to use the net proceeds from this offering to fund development of its product candidates, including ongoing Phase III trials of its lead product, Gvax immunotherapy for prostate cancer, as well as for general corporate purposes.

The shares and warrants are immediately separable and will be issued separately. The five-year warrants will not be exercisable prior to six months after issuance.

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Shares fell 53 cents to $5.55.