ZymoGenetics Inc. (ZGEN) recently announced that it will sell 12 million shares of its common stock in a public offering. The underwriters will have a 30-day option to purchase up to a further 1.8 million shares of common stock to cover any over-allotments. The sole manager for the offering is Leerink Swann. The public offering amounts to approximately 17% of ZymoGenetics’ total outstanding shares of about 69.3 million as of Oct 30, 2009.
 
The offer, which has not yet been priced by ZymoGenetics, is expected to raise more than $80 million. ZymoGenetics intends to utilize part of the net proceeds from the public offering to support sales of its sole marketed product, Recothrom. The balance amount will be used for general corporate purposes and research and development of other pipeline candidates. Recothrom is indicated as an aid to hemostasis whenever oozing blood and minor bleeding from capillaries and small venules is accessible and bleeding cannot be controlled by standard surgical techniques.
 
Last month, ZymoGenetics restructured the agreements with Bayer Schering Pharma AG (SHRGY) and Bayer HealthCare related to Recothrom. The revised agreement, effective from Jan 1, 2010, allows ZymoGenetics to access full marketing rights in the U.S. and all other countries apart from Canada, where Bayer markets and sells the product. Consequently, ZymoGenetics gets royalties on Recothrom sales in that country. The company also shed 52 employees (approximately 15% of its workforce) to focus on building the market for Recothrom. This reduction in workforce is in addition to the 161 employees laid off in April 2009.
Read the full analyst report on “ZGEN”
Zacks Investment Research