Neose Technologies Inc. is raising $28 million in a public offering to fund ongoing development activities, including preclinical and clinical evaluation of its two lead protein products.

The Horsham, Pa.-based company expects to sell 7 million shares of common stock at $4 per share. If underwriters purchase an additional 1.05 million shares to cover overallotments, Neose anticipates net proceeds totaling about $30.3 million. New York-based UBS Investment Bank is acting as the sole book-running manager, and JPMorgan Securities Inc. and Jefferies & Co. Inc., also of New York, are co-managers.

In addition to its product programs, Neose also intends to use proceeds for capital expenditures and general working capital. Barbara Krauter, manager of investor relations for Neose, said the company was in a quiet period Friday and unable to comment.

Neose has said it expects to file investigational new drug applications this year for its lead products, including an improved version of red-blood-cell-stimulator erythropoietin (EPO) and an improved version of granulocyte-colony stimulating factor, which stimulates white blood cells.

Based on proof-of-concept studies, the company said it is designing longer-acting versions of those proteins using its GlycoPEGylation technology, which extends and customizes protein half-life by linking polyethylene glycol polymers to glycans remote from the protein's active site.

Neose's work is based on its enzymatic technologies, using GlycoPEGylation and GlycoAdvance platforms for internal development programs as well as collaborations. Earlier this month, the company extended an existing agreement with Mannheim, Germany-based BioGeneriX AG to develop a long-acting version of a marketed protein using Neose's technology. If BioGeneriX chooses to enter a pre-negotiated research, license and option agreement following a three-month investigational period, Neose would be eligible for up-front fees and research funds and could end up receiving milestone payments totaling $61.5 million. (See BioWorld Today, Feb. 1, 2005.)

In April, Neose and Rockville, Md.-based MacroGenics Inc. entered a research and license agreement for multiple monoclonal antibodies. Under terms of the agreement, Neose is entitled to option fees and milestone and royalty payments. The companies will focus on improving the therapeutic properties of MacroGenics' compounds using Neose's technologies.

GlycoAdvance uses enzymes to complete the sugar chains on glycoprotein drugs, which protects them from rapid uptake by the liver.

Neose's last financing round occurred in May, when the company sold 5 million shares at $6.77 each to raise nearly $34 million, with much of those funds going toward development work. (See BioWorld Today, May 19, 2004.)

The company posted a net loss of $10.8 million for the quarter ending Sept. 30, and had about $55 million in cash and cash equivalents.

Shares of Neose (NASDAQ:NTEC) closed at $4.25 Friday, down 51 cents, or 10.7 percent.

Discovery Laboratories Raising $26.5M

Days after receiving an approvable letter for Surfaxin, Discovery Laboratories Inc. said it is raising $26.5 million in a registered direct offering, selling 4.6 million shares at about $5.76 per share.

The Warrington, Pa.-based company estimates net proceeds to total about $25 million, which will help fund the anticipated market launch of Surfaxin, a prophylaxis therapy for respiratory distress syndrome, as well as ongoing clinical trials and general corporate purposes. The offering is set to close Feb. 24. SG Cowen & Co. LLC, of New York, is the exclusive placement agent for the transaction.

Discovery's shares (NASDAQ:DSCO) lost 37 cents Friday to close at $6.12.

Its stock took a 22 percent plunge earlier this month, after the company reported the FDA's concerns regarding Laureate Pharma Inc., of Totowa, N.J., which manufactures Surfaxin, a synthetic compound containing the peptide sinapultide designed to mimic natural surfactant and allow oxygen absorption. The company's shares fell $1.72 on Feb. 1, to close at $6.07, but bounced back last week when the FDA's approvable letter, made public Feb. 14, called the manufacturing problems "highly correctable." Shares that day rose 63 cents, or nearly 11 percent, to close at $6.42. (See BioWorld Today, Feb. 2, 2005, and Feb. 15, 2005.)

According to the company's guidance, Discovery expects to spend between $8.5 million and $9.5 million per quarter for the next two quarters, with the money raised from the recent financing to continue to support activities associated with the anticipated launch of Surfaxin. Pending marketing approval, Discovery said the drug would be launched by at least the first quarter of 2006.

Discovery also is evaluating Surfaxin in other indications. The drug is in Phase II trials in acute respiratory distress syndrome in adults, bronchopulmonary dysplasia in premature infants and meconium aspiration syndrome in full-term infants.

As of Sept. 30, the company had about $23 million in cash and short-term investments, and had posted a net loss of $8.4 million for the quarter.