Healthcare Industry News: antiviral
News Release - April 19, 2007
Xechem Receives $7 Million from New InvestorsNEW BRUNSWICK, N.J.--(HSMN NewsFeed)--Xechem International, Inc. (OTC BB: XKEM ) announced today that it has received just over $7 million in funding following the closing of a convertible debt financing transaction with a group of largely new investors in the Company. The initial closing of $4.9 million closed on April 4, 2007, with the balance of $2.1 million having closed on April 18, 2007. (For a detailed description of the specific terms of the transaction, see the Company's filing with the Securities and Exchange Commission under Form 8-K, which was filed on April 10, 2007, and the Company's 8-K/A, to be filed shortly). A portion of the proceeds of the financing ($1.1 million) was used to pay down approximately half of the remaining obligation to Alembic Ltd., with the balance to be used for payment of certain existing obligations, progress toward completion of the Nigerian production facility and general working capital purposes. This funding is in addition to the recently announced bank loan of approximately $2.7 million received by the Company's Nigerian subsidiary last week.
Dr. Ramesh Pandey, the Chairman and CEO of Xechem, stated, "This investment in Xechem's future by a group of individuals and entities marks a new phase in Xechem's development and shows how the interest in our Company has now expanded to a larger pool of investors, including certain institutional investors that had previously been unwilling to fund our operations. Coming on the heels of the recently approved Nigerian bank loan of approximately $2.7 million, and with Ex-Im moving closer to approval, we have now accelerated the timetable for the completion of the commercial scale production facility in Nigeria for an opening during the fourth quarter of 2007, while also addressing working capital needs at the Company's corporate headquarters in New Brunswick, New Jersey."
Dr. Pandey added, "I am also pleased that this transaction included lock-ups by a number of persons, including the holder of a significant convertible debt position, which greatly limit the ability to sell Xechem stock over the next several months as we progress toward full scale production and execution of our business plan."
Xechem International is a development stage biopharmaceutical company working on Sickle Cell Disease (SCD), antidiabetic, antimalarial, antibacterial, antifungal, anticancer and antiviral (including AIDS) products from natural sources, including microbial and marine organisms. Its focus is on the development of phyto-pharmaceuticals (natural herbal drugs) and other proprietary technologies, including those used in the treatment of orphan diseases. Xechem's mission is to bring relief to the millions of people who suffer from these diseases. Its recent focus and resources have been directed primarily toward the development and launch of NICOSAN(TM) (to be marketed as HEMOXIN(TM) in the US and Europe). With the Nigerian regulatory approval now in hand, Xechem is now working on the commercialization of the drug in Nigeria and the pursuit of US FDA and European regulatory approval. In addition to NICOSAN(TM), Xechem is also working on another sickle cell compound, 5-HMF, which it has licensed from Virginia Commonwealth University (VCU).
Forward Looking Statements
This press release contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by safe harbors created hereby. Such forward-looking statements involve known and unknown risks and uncertainties. Such risks include the risk that: (i) Xechem Nigeria will be unable to consummate the closing of its proposed Ex-Im bank financing; (ii) there could be delays and/or cost overruns in connection with the build out of Xechem Nigeria's pilot plant facility to a full scale commercial production facility; (iii) the Company and/or Xechem Nigeria could suffer significant dilution from the raising of additional capital until such point in time as they achieve cash flow break even status; (iv) doing business in Nigeria is subject to all of the risks of operation in a foreign country and associated political and regulator risk; (v) the convertible debt financing will not solve all of Xechem's financial needs and has been issued at a price that was a discount to the then current market price for Xechem's common stock; (vi)the convertible debt laces ongoing obligations upon Xechem and the failure to meet those obligations could result in acceleration of the associate indebtedness; and (vii) operations of the Company could be disrupted due to the chronic limited availability of funds to meet ongoing obligations.
Source: Xechem International
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