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DOV must regain Nasdaq listing compliance to avoid 2.5% convertibles tender offer
By Angela McDaniels
Seattle, Aug. 9 - DOV Pharmaceutical, Inc. said it does not have enough capital to fund the tender offer for its 2.5% convertible subordinated debentures due 2025 that will be required if the company cannot regain compliance with the continued listing requirements of The Nasdaq Global Market.
The Nasdaq Listings Qualification Department notified the company on July 31 that the market value of its listed securities fell below $50 million for 10 consecutive business days. DOV has until Aug. 28 to regain compliance.
In the event that DOV's common stock is delisted, the company must offer to repurchase the $70 million outstanding of its convertibles, according to the company's 10-Q report filed with the Securities and Exchange Commission on Wednesday.
The company has no commitments or arrangements for any financing and will need to raise additional capital or pursue a restructuring of its obligations under the convertibles if the tender offer becomes necessary.
DOV noted that any equity or equity-linked financing may result in substantial dilution to its existing equity holders. The company's alternatives will be determined based upon how many of the convertibles are tendered, according to the filing.
If the company regains compliance and is not required to hold a tender offer, DOV believes the $22.2 million of cash, cash equivalents and marketable securities it had at June 30 will be sufficient to fund operations, interest payments and capital requirements through at least June 30, 2007.
The company's accumulated deficit at June 30 was $194.2 million.
Somerset, N.J.-based DOV is a biopharmaceutical company focused on novel drug candidates for central nervous system disorders.
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