DARA Biosciences (Nasdaq: DARA) is selling some stock in order to raise capital for the funding of a sales force that will be provided by a third party.
The Raleigh-based pharmaceutical firm, which focuses on oncology treatments, said Tuesday that it plans to raise $2.5 million in a stock offering. The net proceeds will be used to hire Alamo Pharma Services to provide a sales force of some 20 people that would concentrate on DARA products.
Shares are to be sold at 50 cents each. The deal is with “certain institutional investors” that the company did not identify. It is expected to close Oct. 25.
DARA will pay Alamo a fixed monthly fee and also reimburse the company for some expenses. The deal is for three years.
DARA shares were down 16 % to 49 cents in midday trading Tuesday.