Viragen plans follow-on offering of 67 million units via Dawson James

By Ronda Fears

Memphis, July 31 - Viragen, Inc. plans to sell 67 million units, consisting of one share plus one five-year warrant to purchase one share, via bookrunner Dawson James Securities, Inc.

There is a greenshoe for another 5.36 million units available.

In addition, the company said in an S-1 filing with the Securities and Exchange Commission that it has agreed to sell to the underwriters, for $100, an option to purchase up to 10.5 million units.

Plantation, Fla.-based Viragen, with operations in the United States, Scotland and Sweden, is focused on therapeutic proteins for the treatment of cancers and viral diseases. Its product portfolio includes Multiferon for cancer and selected infectious diseases, VG101 for malignant melanoma tumors and VG102 for solid tumors.

Viragen also is pioneering the development of the OVA System for avian transgenics with Roslin Institute, the creators of Dolly the Sheep - the first mammal to be cloned from an adult cell in 1996, which lived for six years. Viragen said the OVA System is a revolutionary manufacturing platform for the large-scale, efficient and economical production of human therapeutic proteins and antibodies by expressing these products in the egg whites of transgenic hens.

The units are expected to be listed on the American Stock Exchange under the ticker VRA.U and, when separated, the warrants are expected to trade under the ticker VRA.WS.

Viragen noted that it has received deficiency letters from Amex advising its common stock, which trades under the ticker VRA, has not meet continued listing standards regarding minimum stockholders' equity and net losses requirements since June 30, 2005. The company said it has been given a conditional extension until March 20, 2007 to regain compliance.

Proceeds are earmarked to redeem $5,215,000 of series J 24% cumulative convertible preferred stock and payment of $1,251,600 in dividends accrued through Feb. 28, 2007, to redeem $1.8 million of Viragen International's series C 24% cumulative preferred stock and payment of $432,000 in dividends accrued through July 14, 2007, for monthly principal payments of $62,500, plus a 10% premium, on outstanding convertible debentures, for quarterly interest payments on the outstanding balance of the convertible promissory notes, research and development, sales and marketing, administrative expenses and working capital.

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