Kosan pulls stock deal ahead of closing

New York, Aug. 15 - Kosan Biosciences Inc. said that it has cancelled its previously priced offering of 4.5 million shares of common stock.

The announcement comes one day ahead of the closing of the scheduled Aug. 16 deal.

Kosan priced 4.5 million shares of stock at $8.75 in a follow-on offering on Aug. 10.

Credit Suisse First Boston was bookrunner.

Kosan said it took the decision in light of the decline in its share price after Monday's announcement about the NCI-sponsored 17-AAG and DMAG clinical trials.

"We remain confident in our development plans for our Hsp90 inhibitors as potential treatments for cancer," said Daniel V. Santi, Kosan's chairman and chief executive officer in a news release.

"We will aggressively work to resolve any issues raised in today's [Monday's] earlier announcement and provide additional information when it is available. Closing the second quarter with $69 million in reserves and a $35 million credit line, we have considerable flexibility to pursue our development programs."

Kosan, based in Hayward, Calif., had planned to use proceeds for research and development and general corporate purposes.

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