$45 million shot of cash to help Corixa’s survival

Corixa has raised $45 million from private
investors during one of the worst biotech
financial markets ever, giving the Seattle
company enough money to survive for at least
two years.

By Luke Timmerman
Seattle Times business reporter

Corixa raised the money by selling about 7.3 million shares of stock at $6.13
apiece to a group of institutional and private investors and by handing out 1.2
million warrants, which allow investors to buy more stock at a set price for up to
five years. The deal is expected to close tomorrow.

InterWest Partners was the lead investor, followed by BankAmerica Ventures,
Seattle-based Frazier Healthcare Ventures, Hambrecht & Quist Capital
Management and three other investment firms.

The news pushed Corixa stock up 19 cents, or 3.1 percent, to $6.31.

Corixa said it will use the money for research and development, working capital
and general corporate purposes. Its top priority is Bexxar, an experimental drug
for non-Hodgkin’s lymphoma that a Food and Drug Administration advisory panel
is expected to scrutinize this year. If approved, Bexxar would be Corixa’s first
drug in the United States.

Corixa had $80.5 million in cash and investments at the end of June; the new
investment will give it about $120 million total.

Corixa expects to spend $55 million to $65 million in cash this year, possibly
less next year, because it has cut 130 jobs in South San Francisco.

Still, the expense of 370 employees and about 12 programs in active clinical
trials mean Corixa can run at least two years — or much more, depending on
what happens to Bexxar, said Chief Financial Officer Michelle Burris.

Corixa also can draw on a $75 million equity line of credit from BNY Capital
Markets.

Burris said the financing was a show of faith in Bexxar and other drug
candidates.

"People believe we have the ability to translate our science into products that
can help people," Burris said.

Paul Latta, an analyst with McAdams Wright Ragen, said the financing was
mixed news; it provides important cash but dilutes the stock’s value for existing
shareholders.

Corixa had to sell more shares than in the past because of the stock’s relatively
low price. Corixa’s initial public offering in 1997 was priced at $13 a share; a
secondary offering in the biotech boom of 2000 was priced at $32.

"(This investment) does suggest there’s some degree of confidence in the
company," Latta said.

Luke Timmerman: 206-515-5644 or [email protected]

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