Renovis Inc. priced a public offering on Friday that will bring the company $54 million in gross proceeds for research and development expenses.

The South San Francisco-based company is offering 4 million shares at $13.50 each, a discount to its closing stock price of $13.92 on Thursday. The stock (NASDAQ:RNVS) gained 1 cent Friday to close at $13.93.

New York-based Goldman, Sachs & Co. is acting as the sole book-running manager, while CIBC World Markets Corp. and SG Cowen & Co. LLC, both of New York, and Minneapolis-based Piper Jaffray & Co. are co-managers. They have been granted an overallotment option for an additional 600,000 shares. The offering should close by Wednesday.

Net proceeds are expected to be $50.4 million, or $58 million if the underwriters exercise their overallotment option in full. The money will go toward research and development, including clinical trials for any future product candidates, and working capital and other general corporate purposes, according to the company's prospectus. Renovis declined comment due to SEC quiet-period rules.

Most recently, Renovis has had a string of setbacks, including a missed primary endpoint in a Phase II sciatica trial for REN-1654, and the delay of a regulatory filing for its stroke drug Cerovive. (See BioWorld Today, July 29, 2005, and Aug. 29, 2005.)

In the spring, the company also said it would end development of REN-850, its leukocyte-traffic inhibitor for multiple sclerosis due to unexpected pharmacokinetics in a Phase Ia trial.

But investors still are showing a great deal of interest in the company, mainly because of its lead drug Cerovive, a neuroprotectant that has been shown to limit damage to brain tissue and preserve brain function.

The delay of a regulatory filing in the U.S., from the second half of 2006 to the second half of 2007, is mostly due to the company's decision to increase patient enrollment in a Phase III trial.

The trial, called SAINT II, is enrolling 3,200 patients instead of the originally planned 1,700 to make sure it is powered enough to support the results of SAINT I, completed earlier this year.

In May, Renovis and its partner AstraZeneca plc, of London, reported positive results from the Phase III SAINT I trial involving more than 1,700 patients. Cerovive achieved its primary endpoint by showing a statistically significant reduction vs. placebo of disability in patients after an acute ischemic stroke (p=0.038) as measured using the modified Rankin Scale (mRS).

The product also displayed an excellent safety profile and was well tolerated, showing efficacy regardless of time to treatment, stroke severity and treatment with tPA (tissue plasminogen activator; Activase), the only approved product to treat acute ischemic stroke in the U.S.

Yet, the therapy did not hit a co-primary endpoint by showing a significant effect on neurological impairment as measured using the National Institutes of Health Stroke Scale (NIHSS). The company believes, however, that the primary endpoint, measured using the mRS, will be sufficient evidence of efficacy. In addition to raising the number of patients enrolled in SAINT II, Renovis also added an endpoint that will show a certain reduction of intra-cerebral hemorrhage in tPA-treated patients, and it has modified the statistical analysis of the neurological impairment endpoint as measured by NIHSS.

As the only approved treatment, South San Francisco-based Genentech Inc.'s tPA comes with an increased risk of intra-cerebral hemorrhage and is used to treat fewer than 5 percent of stroke patients, potentially offering Cerovive a large chunk of the market. If the product gains approval, Renovis would be entitled to receive mid-teen percentage royalties on worldwide net sales from AstraZeneca.

At the earlier stage of development, Renovis is working on small molecules that inhibit vanilloid receptor (VR1) to develop a new class of treatment for inflammatory pain, neuropathic pain, urinary incontinence and other disorders. In May, the company entered into a $187 million preclinical research deal with New York-based Pfizer Inc. for products that inhibit VR1. (See BioWorld Today, June 1, 2005.)

The company also is collaborating with Genentech to discover and develop drugs that inhibit angiogenesis and promote nerve re-growth following nervous system injury.

Independently, Renovis is pursuing development of next-generation compounds that act similarly to Cerovive to treat myocardial infarction, kidney disease, stroke, neurodegeneration and other diseases in which ischemia plays a role.

Founded in 2000, the company went public in February 2004, raising $66 million. As of June 30, it had $68.9 million in cash, cash equivalents, restricted cash and marketable securities.

Following this offering, the company has 28.9 million shares outstanding.