Assistant Managing Editor

A week after submitting its biologics license application for Zalbin (albinterferon alfa-2b), a less frequent interferon for hepatitis C, Human Genome Sciences Inc. priced a public offering of 15.5 million shares - 3 million more than originally planned - at $26.75 each, for gross proceeds of $414.6 million.

It marks only a small discount to the company's Tuesday closing share price and, despite the additional dilution, Wall Street pushed shares of Rockville, Md.-based company (NASDAQ:HGSI) up 55 cents to close Thursday at $28.01.

HGS's stock has been on a wild ride since July, when shares were trading around the $3 mark before stellar results of the first Phase III trial of lupus drug Benlysta (belimumab) sent the stock shooting up a whopping 277 percent. Shortly after, the firm took advantage of that jump with a public offering of 23.2 million shares priced at $14 apiece for $310 million in proceeds. (See BioWorld Today, July 21, 2009, and July 30, 2009.)

And the Benlysta news only got better, as detailed data from that first trial emerged in October, followed by success in the second pivotal study that sent shares soaring another 35 percent. (See BioWorld Today, Oct. 21, 2009, and Nov. 3, 2009.)

Net proceeds from the latest offering are expected to total about $397 million - bringing the company's cash balance to more than $1 billion when added to the $697.2 million as of Sept. 30 - and will be used for general corporate purposes, which includes securing additional manufacturing capacity for Benlysta, which is set for a biologics license application filing in the first half of next year.

Benlysta is partnered with London-based GlaxoSmithKline plc.

Funds also will be used to develop Benlysta, a BLyS-specific inhibitor, in additional indications, such as rheumatoid arthritis, for which it is in mid-stage testing, as well as for potential sales and marketing activities, clinical trial work, R&D work and possibly strategic investments.

HGS could use funds to pay down some of its debt, as well. As of Sept. 30, the firm had about $344.4 million in convertible subordinated debt.

While Benlysta has gotten most of the attention over the last six months, HGS was continuing work on its other late-stage programs. Last week, it submitted a BLA for Zalbin (albinterferon alfa-2b), an interferon designed with its albumin-fusion technology to be dosed less frequently than currently marketed interferons. (See BioWorld Today, Nov. 30, 2009.)

In mid-November, the company got a not-unexpected complete response letter for anthrax compound raxibacumab, three weeks after an FDA panel raised concerns about the human pharmacokinetic data included in the BLA. But that has not hampered the company's $151 million, three-year deal with the U.S. government, which already has ordered at least 65,000 doses for the Strategic National Stockpile. (See BioWorld Today, Oct. 28, 2009, and Nov. 17, 2009.)

HGS posted a net loss of $49 million, or 32 cents per share, for the third quarter, though financial data for the first nine months of 2009 show the company in the black, with net income of $15.4 million, thanks to total revenues of $222.28 million, which stems from its government deal with raxibacumab and partnership revenue from Basel, Switzerland-based Novartis AG for Zalbin and from GSK for its work on Benlysta and Syncria, a diabetes drug designed using HGS' albumin-fusion technology.

The public offering, set to close Dec. 9, could pull in an additional $62 million if underwriters Goldman, Sachs & Co. and Citigroup Global Markets Inc. exercise their full option to purchase another 2.325 million shares.

At the close of the offering, HGS will have about 180.5 million shares outstanding - 182.8 million with the overallotment option.

In other financings news:

• AmVac AG, of Zug, Switzerland, has received CHF 1.5 million (US$1.5 million) from private equity firm V+ GmbH & Co. Fonds 2 KG, in Dresden, Germany, since the first half of this year, and expects to gain an additional CHF 3 million. AmVac is developing therapeutic vaccines in the areas of gynecology and urology.

• ArGen-X BV, of Rotterdam, the Netherlands, raised €3 million (US$4.5 million) in the second closing of its Series A round from Credit Agricole Private Equity and the Flemish research institute VIB. Funds are expected to support work on the company's SIMPLE Antibody engine and to build a preclinical antibody portfolio. Philippe Guinot, of Credit Agricole, joined arGen-X's board. The company has raised a total of €12.5 million in the oversubscribed round, which was co-led by Forbion Capital Partners and Life Sciences Partners and included participation from KBC Private Equity, BioGeneration Ventures, Erasmus MC Biomedical Fund and Thuja Capital Healthcare Funds.

• Curetis AG, of Holzgerlingen, Germany, raised €18.5 million (US$27.9 million) in venture funding provided by seed investor Aeris Capital, along with new investors Life Sciences Partners, BioMedPartners and the ERP-Startfonds of the KfW Bankengruppe. MedVenture Partners GmbH supported Curetis in concluding the transaction. Curetis, a molecular diagnostics firm, initially is focusing in the area of severe bacterial infections.