DARA Bioscience's Offering Oversubscribed
RALEIGH, N.C., Jan 4, 2011 (GlobeNewswire via COMTEX) --
On December 28, 2010, DARA BioSciences, Inc. (the "Company") (Nasdaq:DARA) announced that it planned to raise up to $4 million through a registered public offering of units comprised of shares of Series A convertible preferred stock and warrants to purchase shares of common stock. Due to strong demand for the offered securities, the Company increased the size of the offering to up to $4.8 million.
The closing of the sale of units took place on December 30, 2010. Richard A. Franco Sr., the Company's President and CEO, purchased 200 of the units, for a purchase price of $200,000.
Estimated net proceeds after payment of placement agent fees and other offering expenses are approximately $4.3 million. The net proceeds received by the Company from the offering will be used for the ongoing development of its lead candidates and for working capital and general corporate purposes. With cash on hand plus these proceeds the Company believes it has sufficient capital to operate effectively over the next 12 months.
At the closing the Company issued to investors 4,800 shares of Series A convertible preferred stock (which are convertible into a total of 1,920,000 shares of common stock), Class A Warrants to purchase 960,000 shares of common stock and Class B Warrants to purchase a total of 960,000 shares of common stock.
Shares of Series A preferred stock have a liquidation preference equal to $1000 per share and, subject to certain ownership limitations, are convertible at any time at the option of the holder into shares of Company common stock at a conversion price of $2.50 per share.
Class A Warrants are exercisable immediately after the date of issuance and expire five years after the date of issuance. Class A Warrants will entitle the holder to purchase shares of common stock for an exercise price equal to $2.50.
Class B Warrants are exercisable immediately after the date of issuance and expire one year after the date of issuance. Class B Warrants will entitle the holder to purchase shares of common stock for an exercise price equal to $2.50.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE Amex:LTS), acted as the Company's exclusive placement agent for the offering.
About DARA BioSciences, Inc.
DARA BioSciences, Inc. is a Raleigh, North Carolina based biopharmaceutical development company that acquires promising therapeutic candidates and develops them through proof of concept in humans for subsequent sale or out-licensing to larger pharmaceutical companies. Presently DARA has two drug candidates with cleared IND (Investigational New Drug) Applications from the United States FDA. The Company has a pipeline of diverse drug candidates at various stages of development, with 82 granted patents and 56 pending applications (US and foreign). The first drug candidate KRN5500 has successfully completed a Phase 2 clinical trial treating neuropathic pain in patients with cancer. KRN5500 met its primary endpoint and was statistically significantly (p=0.03) better than placebo. A second Phase 2 clinical trial is planned during the first half of 2011. In addition, DARA has entered into a Clinical Trial Agreement with the National Cancer Institute to study the prevention and treatment of neuropathic pain in cancer patients. The second drug candidate DB959 is an oral, highly selective, non-thiazolidinedione (TZD), first-in-class dual PPAR (peroxisome proliferator activated receptor) delta/gamma agonist in development for type 2 diabetes. A Phase 1 clinical study has been completed and the positive results were announced earlier this year. A second Phase 1 is planned to commence in the first quarter 2011 and the Company plans to announce results in the second half of 2011. In addition, DARA owns CPT-1 inhibitors intended for topical application for patients with psoriasis, a library of DDPIV inhibitors and a diverse library of approximately 1800 PPAR agonists of various molecular modalities. PPAR receptors are found throughout the human body and recent publications report that PPAR agonists may be useful in the treatment of Alzheimer's disease, cystic fibrosis, liver disease, and a variety of autoimmune diseases. Because its diverse PPAR library has the potential to address the unmet medical needs of these diseases, the Company plans to explore several of these indications.
Safe Harbor Statement
All statements in this news release that are not historical are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are subject to factors that could cause actual results to differ materially for DARA from those projected. Those factors include risks and uncertainties relating to DARA's current cash position and its need to raise additional capital in order to be able to continue to fund its operations, risks and uncertainties relating to the potential delisting of DARA's common stock from the NASDAQ Capital Market, risks and uncertainties relating to DARA's ability to develop and bring new products to market as anticipated, the current regulatory environment in which the company develops and sells its products, the market acceptance of those products, dependence on partners, successful performance under collaborative and other commercial agreements, competition, the strength of DARA's intellectual property, the intellectual property of others, and other risk factors identified in the documents DARA has filed, or will file, with the Securities and Exchange Commission ("SEC"). Copies of DARA's filings with the SEC may be obtained from the SEC Internet site at http://www.sec.gov. DARA expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward -looking statements contained herein to reflect an y change in DARA's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based. DARA BioSciences and the DARA logo are trademarks of DARA BioSciences, Inc.
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SOURCE: DARA BioSciences, Inc.
CONTACT: Cameron Associates, Inc.