Israeli pharmaceutical company Kamada raised $51.6 million in its initial public offering on Nasdaq last Friday, offering 5.6 million shares at $9.25 per share. That was16.6% below its Thursday closing price on the Tel Aviv Stock Exchange.
The underwriters for the IPO were Morgan Stanley, the Jeffries Group, RBC and Oppenheimer. They received a 30-day green-shoe option to buy up to 837,000 shares - 15% of the offering - at $8.6 per share, 15% below the market price.
Shares of Kamada, which makes plasma-based treatments, closed at $10.10 on their first day of trade in New York, 9.2% above the issue price, opening up a negative arbitrage gap of 9%.
Kamada is earmarking between $15 million and $25 million of its $45.6 million in net proceeds from the IPO for clinical trials and research and development for new uses of AAT. This molecule is the active ingredient of the company's U.S. Food and Drug Administration-approved drug Glassia.
The drug is used to treat emphysema caused by congenital deficiency of alpha1-proteinase inhibitor. It has been distributed since September 2010 in the United States, Canada, Australia and New Zealand by Baxter Healthcare Corporation.
The company said in its registration statement with the U.S. Securities and Exchange Commission that it may use a portion of the proceeds to repurchase up to the $27.2 million balance on its convertible debentures.
The company's Series 3 bonds can be converted and are redeemable in three equal annual payments beginning in December 2013. They carry a high interest rate - a spread of 6.1% above Series 817 Israeli government bonds.
Kamada also told the SEC it plans to enhance and expand its manufacturing infrastructure.
One of the direct beneficiaries of Kamada's Nasdaq IPO is CEO and Director David Tsur, who was granted a public offering bonus equal to 2% of the net proceeds, up to $1 million. That should come to $912,000 for this offering.
Tsur also received 150,000 stock options for ordinary shares, approved in April by the company's compensation committee and in May by shareholders. These options can be exercised on a cashless basis at a price of $41.47 - 1.5% above the share's closing price on the TASE Thursday - after the completion of the offering or of a merger or acquisition of the company.
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