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Solexa Announces Agreement For $32.5
Million Private Equity Financing And Appoints G. Mason Morfit To Board Of
Directors
HAYWARD, Calif. (April 22, 2005) – Solexa,
Inc. (Nasdaq: SLXA) today announced that it has entered into a definitive
agreement for a $32.5 million private sale of common stock and warrants
for the purchase of common stock with a group of leading institutional
investors in the health care sector. The transaction is led by ValueAct
Capital. Solexa also announced that G. Mason Morfit, CFA, a partner of
ValueAct Capital, has been appointed to its board of directors, bringing
board membership to eight.
Under terms of the financing, Solexa will sell approximately 8.1 million
shares of common stock at $4.00 per share and will issue warrants to
purchase approximately 4.1 million shares of common stock at an exercise
price of $5.00 per share. Approximately 2.1 million shares of common stock
and approximately 1.1 million warrants will be issued in a closing
expected on or about April 25, 2005, and the balance of approximately 6.0
million shares of common stock and warrants to purchase approximately 3.0
million shares of common stock will be issued on the same terms in a
second closing subject to stockholder approval at the 2005 annual meeting.
Solexa’s intended use of proceeds includes the development and launch of
its first-generation Sequencing-by-Synthesis (SBS) molecular array
platform for genetic analysis and repayment of its loan from Silicon
Valley Bank. All of Solexa’s previous venture capital investors, including
funds affiliated with Abingworth Management Limited, Amadeus Capital
Partners Limited, Oxford Bioscience Partners and SV Life Sciences, will be
investing a total of approximately $10.8 million in the financing at the
second closing of the financing and have entered into agreements with
Solexa to vote in favor of the financing at the 2005 annual meeting. SG
Cowen & Co., LLC served as the exclusive placement agent for the
transaction.
“We are delighted to bring in funding for the introduction of our first
SBS system at the end of 2005, which we expect will dramatically lower the
cost of DNA sequencing and gene expression analysis, and for our
commercialization ramp in 2006,” said John West, Solexa’s chief executive
officer. “I am pleased to welcome Mason, with his capital markets
experience and leadership abilities, to Solexa’s board.”
“I envision a significant commercial opportunity for Solexa as the Company
brings to market its nextgeneration technology for DNA sequencing,” said
G. Mason Morfit. “I’m pleased my board appointment comes on the heels of
Solexa’s announcement that it has completed its first full genome
sequence, for the virus Phi-X174, which represents a major milestone for
Solexa’s SBS technology. On behalf of ValueAct Capital, I look forward to
working actively with Solexa’s management and board.”
These securities have not been registered under the Securities Act of
1933, as amended, or any state securities laws and may not be offered or
sold in the United States absent registration with the Securities and
Exchange Commission (SEC) or an applicable exemption from the registration
requirements. Solexa has agreed to file a registration statement with
respect to the shares within the earlier of ten days following the second
closing of the financing or eighty days following the first closing. This
news release is not an offer to sell or the solicitation of an offer to
buy the securities discussed herein.
About the Market for SBS Technology
Solexa is designing its initial system with the goal of enabling users to
ascertain a human genome sequence for about $100,000. This is
approximately 100 times lower than the costs of conventional sequencing.
Solexa’s initial strategy is to focus on the well established research
market. This market includes DNA sequencing, gene expression and
genotyping, all at full genome scale. These together already represent an
approximately $1 billion market. According to IDC, the DNA sequencing
segment has the potential to grow to $1.6 billion with the advent of the
$100,000 genome.*
About Solexa
Solexa, Inc. is developing and preparing to commercialize a new platform
for genetic analysis, based on Sequencing-by-Synthesis (SBS) and molecular
arrays. This one platform is expected to support many types of genetic
analysis, including DNA sequencing, gene expression, genotyping and micro-
RNA analysis. This technology can potentially generate over a billion
bases of DNA sequence from a single experiment with a single sample
preparation. Solexa’s long-term goal is to reduce the cost of human
re-sequencing to a few thousand dollars for use in a wide range of
applications from basic research through clinical diagnostics. The company
anticipates an initial product launch by the end of 2005. For further
information, please visit www.solexa.com.
Zachary Zimmerman, Ph.D., “The $1,000 Human Genome – Implications for Life
Science, Healthcare and IT”, IDC, 2004.
This press release contains "forward-looking" statements, including
statements related to the current views of Solexa management as to future
products, product development, the expansion and success of Solexa’s
commercial application of its genomics technologies, and the future
financial performance of Solexa. Any statements contained in this press
release that are not statements of historical fact may be deemed to be
forwardlooking statements. Words such as "believes," "anticipates,"
"plans," "predicts," "expects," "envisions," "hopes," "estimates,"
"intends," "will," "continue," "may," "potential," "should," "confident,"
"could" and similar expressions are intended to identify forward-looking
statements. There can be no assurance that such expectations of any of the
forward-looking statements will prove to be correct, and actual results
could differ materially from those projected or assumed in the
forward-looking statements. There are a number of important factors that
could cause the results of Solexa to differ materially from those
indicated by these forward-looking statements including, among others,
risks detailed from time to time in the Company’s SEC reports, including
its Annual Report on Form 10-K for the year ended December 31, 2004.
Solexa does not undertake any obligation to update forwardlooking
statements.
For more
information, please contact:
Solexa, Inc
Europe: Simon Bennett, Business Development
Director, +44 (0)1799 532 300 (mobile +44 (0)7768 014597),
Simon.Bennett@solexa.com
Press Contact:
Northbank
Communications: Sue Charles, CEO, +44 (0)20 7886 8152,
s.charles@northbankcommunications.com
Investor Contact:
Lippert/Heilshorn
& Associates, Jody Cain (jcain@lhai.com),
Bruce Voss (bvoss@lhai.com),
310/691-7100
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