West Coast Editor

Following last summer's go-ahead for its Phase III trial of PolyHeme, a hemoglobin-based oxygen carrier for hemorrhagic shock brought about by severe injury, Northfield Laboratories Inc. has priced an offering of 4.5 million shares at $15 each, for gross proceeds of about $67.5 million.

The company's stock (NASDAQ:NFLD) closed at $17.90, up $1.29.

Expected to close Feb. 9, the offering includes for underwriters a 30-day option to purchase up to 675,000 additional shares of common stock to cover overallotments, if any, which would add $10.1 million to the gross proceeds.

Steven Gould, chairman and CEO of Evanston, Ill.-based Northfield, was traveling and could not be reached, but a prospectus related to the offering said net proceeds will total about $63.3 million (or about $72.8 million if the underwriters' overallotment option is exercised in full), and will be used to fund post-enrollment activities in the PolyHeme trial, prepare and submit a biologics license application and construct a 75,000-unit-per-year manufacturing plant in Mt. Prospect, Ill., expected to cost $35 million to $40 million.

Some of the money also will go toward building a sales force and for general corporate purposes, according to the prospectus.

In July, Northfield won the nod from an independent monitoring group to continue with the pivotal Phase III study of the PolyHeme blood substitute, which was especially good news since the FDA turned down the company's application in 2001, citing concerns about the design of an earlier trial. (See BioWorld Today, July 22, 2004.)

The following month, Northfield got word of $1.4 million in designated funding for the continued development of PolyHeme as part of the Fiscal 2005 Defense Appropriations Bill signed by President Bush.

New York banks are handling the offering. UBS Investment Bank is acting as sole book-running manager, SG Cowen as co-lead manager and Harris Nesbitt co-manager.

Threshold Pharmaceuticals Joins Nasdaq

In other financing news, Threshold Pharmaceuticals Inc., of Redwood City, Calif., priced its initial public offering of about 5.3 million shares at $7 per share, to raise about $37.3 million. When Threshold filed for the IPO in April, hopes were much higher, with the money target set at $86.25 million. The company in January suggested a price ranger per share of $14 to $16, then earlier last week decreased that range to $8 to $10.

The company's stock (NASDAQ:THLD) closed Friday at $7.19, up 14 cents. A spokeswoman for Threshold said she could not comment because of the SEC-mandated quiet period.

In December, the company started enrollment for a Phase I/II trial evaluating the dosing, safety and activity of its lead product glufosfamide in combination with gemcitabine for treating advanced solid malignancies or as a first-line treatment for pancreatic cancer.

Threshold's main areas of focus are cancer and benign prostatic hyperplasia. Glufosfamid has completed five Phase II trials, and holds fast-track status as a therapy for unresectable locally advanced or metastatic pancreatic adenocarcinoma previously treated with gemcitabine.

TH-070, the BPH drug in Phase II trials, is designed to work by inhibiting glycolysis (energy production by sugar breakdown) in prostate cells.

Joint book-running managers for the offering are Banc of America Securities LLC in New York and CIBC World Markets Corp., also in New York. Lazard Freres & Co. LLC in New York and William Blair & Co. LLC in Chicago are acting as co-managers. Threshold has granted the underwriters a 30-day option to purchase an additional 800,000 shares of common stock at the initial public offering price to cover overallotments, if any.

Like Threshold, others in recent weeks have priced IPOs lower than hoped.

Favrille Inc., of San Diego, on Thursday priced its IPO of 6 million shares at $7 each for total gross proceeds of $42 million. The company filed in April. In January of this year, Favrille said it intended to price its shares between $12 and $14, but it reduced that range earlier this week to between $7 and $8.

Late last month, ViaCell Inc., of Boston, priced its latest effort at an initial public offering, selling 7.5 million shares of common stock at $7 a share, raising $52.5 million. The anticipated range had been $7 to $9. (See BioWorld Today, Jan. 24, 2005.)