Staff Writer

Lexicon Genetics Inc. raised net proceeds of about $49 million after pricing a public offering of 10 million common shares at $5.25 apiece.

On Thursday, its stock (NASDAQ:LEXG) lost 37 cents to close at $5.13. The shares have lost 25 percent of their value since last week, when Lexicon first reported its public offering plans. (See BioWorld Today, July 17, 2003.)

Lexicon, which could not comment because of an SEC-imposed quiet period, said in its prospectus that it would use the proceeds for research and development and general corporate purposes, including capital expenditures and working capital needs. The company added that it also could use some or all of the proceeds to acquire or invest in businesses, products and technologies complementary to its own.

Though it has no clinical candidates, Lexicon has more than 20 targets in drug discovery programs. Its most advanced include LG653 for obesity and diabetes, LG914 for atherosclerosis, LG152 for cancer, LG293 for inflammation and LG617 for cognitive disorders.

The Woodlands, Texas-based company offered the shares under an effective shelf registration statement to sell up to 12 million shares, previously filed with the SEC.

As of March 31, Lexicon reported about $107.6 million in cash and investments, along with 52.3 million shares outstanding. It lost $17.1 million during the first quarter.

Four New York-based investment firms are handling the offering. UBS Securities LLC and Morgan Stanley & Co. Inc. are its joint lead managers, with the latter its sole bookrunner. Other managing underwriters include CIBC World Markets Corp. and Punk, Ziegel & Co. LP. They have a 30-day overallotment option to purchase up to an additional 1.5 million shares

Columbia To Use Fresh Funding For Product Launch

Columbia Laboratories Inc. raised gross proceeds of $26.3 million through the sale of about 2.2 million common shares to institutional investors at $11.70 apiece.

The Livingston, N.J.-based company said it would use the funds to strengthen its balance sheet as it expands its sales force in preparation for the launch of Striant, and looks to progress its research and development programs. Approved by the FDA last month, Striant (testosterone buccal system) is designed to treat hypogonadism. Columbia also said it is developing a buccal delivery system for peptides.

Its shares (AMEX:COB) fell 39 cents Thursday to close at $12.20. As of March 31, the company reported about 35.5 million shares outstanding. It lost $4.7 million during the first quarter, and had $3.6 million in cash and cash equivalents at that point.

Investment In Biopure To Further Oxygen Therapeutics

Biopure Corp. grossed $17.2 million through the sale of about 3.1 million common shares to a group of investors at $5.58 each.

The company said it would use the net proceeds, estimated at about $16.2 million, for general corporate purposes, including capital expenditures and to meet working capital needs. Based in Cambridge, Mass., Biopure develops oxygen therapeutics, a new class of intravenously administered drugs designed to deliver oxygen to tissue for the treatment of acutely anemic surgical patients and other potential medical applications.

Its shares (NASDAQ:BPUR) fell 2 cents Thursday to close at $5.60. Through April 30, the company reported $15.1 million in cash and investments. It lost about $11.7 million in its most recently reported quarter, through which it reported 33.4 million shares outstanding.

Biopure sold all the shares under an effective shelf registration statement previously field with the SEC. ThinkEquity Partners LLC, of New York, acted as the offering's placement agent.

Avanir Raises Funds For Phase III Product

Avanir Pharmaceuticals Inc. raised $10 million, funding the company expects to use to further develop its late-stage clinical product, Neurodex. The San Diego-based company sold shares of Class A common stock at $1.49 apiece to accredited investors, who also received a warrant to purchase one Class A common share at $2.23 for every five shares of stock purchased in the offering.

Avanir said its neurology drug Neurodex is being studied in what it expects to be a final Phase III trial for pseudobulbar affect, also known as emotional lability. The company added that it expects to file for FDA approval of the product next year. Neurodex also is being studied in neuropathic pain.

Avanir's shares (AMEX:AVN) fell 19 cents Thursday to close at $1.73. Through March 31, the company reported $19.8 million in cash, cash equivalents and investments. It lost about $6 million in the quarter, through which it reported 58.4 million shares outstanding.

ThinkEquity Partners acted as the offering's placement agent.

Investors Commit To Northfield's Blood Substitute

Northfield Laboratories Inc. said it would raise $10.6 million after receiving commitments from accredited investors to purchase about 1.9 million common shares at $5.60 apiece in a registered direct offering. The investors also will have a 60-day option to purchase up to an additional 568,000 shares for an additional $3.18 million.

The Evanston, Ill.-based company, which last month filed a $50 million shelf registration statement, said it would use the proceeds to support its pivotal Phase III trial of PolyHeme, an oxygen-carrying blood substitute designed for trauma and surgical uses.

Northfield's stock (NASDAQ:NFLD) lost 19 cents Thursday to close at $7.82. For the period ended Feb. 28, the company reported cash and short-term investments of $9.5 million after a $2.9 million net loss for the quarter. It had about 14.3 million shares outstanding at the time.

New York-based SG Cowen Securities Corp. acted as the placement agent for the offering, which is expected to close July 28.

Privately Held TransOral Raises Second-Round Funds

TransOral Pharmaceuticals Inc. closed its Series B round financing worth $7.5 million, funds the San Rafael, Calif.-based firm said it would use to develop fast-acting dosage forms of major-market drug products.

Menlo Park, Calif.-based Montreux Equity Partners led the investor syndicate, which also included Hamilton Apex Technology Ventures, of San Diego; BioAsia Investments, of Palo Alto, Calif.; and Peninsula Equity Partners, of Menlo Park.