Washington Editor

A public offering netted $176 million for Amylin Pharmaceuticals Inc., which plans to use the funds to expand its commercialization capabilities in advance of regulatory action on its two lead product candidates, Symlin and exenatide. Both diabetes drugs are under FDA review.

In the transaction, the San Diego-based company sold 8 million common shares for $22 apiece. The deal also included a 1.2 million-share overallotment option for the underwriters, good for 30 days. The sale's per-share price represented a slight discount to the prior day's $22.26 closing bid on the stock, and on Friday, the shares (NASDAQ:AMLN) gained 40 cents to close at $22.66.

Company officials did not return calls seeking comment.

For Symlin (pramlintide acetate), a synthetic version of the human hormone amylin, the FDA is expected to give comment by March 20 on Amylin's response to a second approvable letter sent out about a year ago. In it, the agency had requested additional clinical data to identify a patient population and method of use for Symlin in which there is no increased risk of significant hypoglycemia or where there is an added benefit that clearly counterbalances any potential for increases in episodes of hypoglycemia. The product has been developed for Type I diabetics and insulin-using patients with Type II diabetes.

Amylin is developing exenatide in partnership with Eli Lilly and Co. to improve glucose control in Type II diabetics who are not achieving target glucose levels with metformin and/or sulfonylureas. A new drug application for a twice-daily formulation was submitted last summer, and the FDA is expected to act on the filing by April 30.

A sustained-release formulation, which also is in joint development with Indianapolis-based Lilly, is in Phase II. It is among three Phase II programs that will benefit from the new funding. For obesity, a product called AC137 is about to enter a Phase IIb dose-ranging study. It's made of pramlintide, the same compound contained in Symlin. In cardiovascular disease, Amylin has advanced AC2592 (glucagon-like peptide 1) into Phase II for severe congestive heart failure.

The funding also will support two Phase I programs, one for the treatment of atherosclerosis-related cardiovascular disease and another for obesity, and help the company maintain its discovery research program focused on peptide therapeutics. Amylin also continues to seek in-licensing opportunities, with any eventual deals to be funded by the added financing.

Amylin had about $336.8 million in cash, cash equivalents and investments as of Sept. 30.

In the stock sale, Morgan Stanley & Co. Inc. is acting as the sole book-running manager for the offering, which it is jointly leading with Goldman, Sachs & Co. Both are in New York. Co-managers include Banc of America Securities LLC, also of New York, JPMorgan Securities Inc., of New York, as well, and Wachovia Capital Markets LLC, of Baltimore.

CytRx Agrees To Sale Of Stock, Warrants

CytRx Corp. raised gross proceeds of about $21.3 million by way of a private stock and warrant sale.

The Los Angeles company entered a definitive agreement with institutional investors to sell about 17.3 million common shares in the deal, as well as warrants to purchase another 8.7 million shares at an exercise price of $2 apiece. CytRx also agreed to register for resale all the shares sold in the placement, together with the shares issuable upon exercise of the warrants. As of Jan. 20, CytRx had about 39.5 million shares outstanding.

The company said the funding would allow it to begin next quarter a Phase II trial of arimoclomol, a product in development for amyotrophic lateral sclerosis. Funds also will be used to expand small-molecule, RNAi and DNA vaccine programs in obesity, Type II diabetes and viral diseases.

Rodman & Renshaw Inc., of New York, served as the financing's lead placement. On Friday, CytRx's stock (NASDAQ:CYTR) lost 13 cents to close at $1.47.

Public Offering Brings ISTA $49M

ISTA Pharmaceuticals Inc. grossed about $49 million after publicly offering 5.5 million common shares at $8.88.

The Irvine, Calif.-based ophthalmic company plans to use the funds to finance potential acquisitions and license complementary businesses, assets, technologies and products. It also plans to direct the capital for the continued development of its product candidates, the expansion of its commercial infrastructure to launch and commercialize products, and for other corporate purposes. Lastly, ISTA plans to use a portion of the funds to repay the remaining $3.5 million in debt to Allergan Inc., also of Irvine, from its September reacquisition of Vitrase's U.S. rights. Vitrase is marketed as a spreading agent to facilitate the dispersion and absorption of other drugs, and the regained rights are for its use in back-of-the-eye indications. A new drug application for vitreous hemorrhage produced an approvable letter from the FDA, which almost two years ago asked ISTA to further analyze existing data. (See BioWorld Today, April 8, 2003.)

In the placement, ISTA also granted the underwriters an 825,000-share overallotment option. Banc of America Securities LLC and Thomas Weisel Partners LLC in San Francisco will act as the joint book-running managers. Co-managers include Lazard Freres & Co. LLC and C.E. Unterberg, Towbin LLC. Both are in New York.

All the shares are being sold by the company, which expects the financing to close on or about Wednesday. On Friday, its stock (NASDAQ:ISTA) gained 67 cents to close at $9.55.

Public Stock Sale Nets $70.8M For Martek

Martek Biosciences Corp., a maker of fluorescent markers for diagnostics, rapid miniaturized screening, and gene and protein detection, is expecting to receive net proceeds of about $70.8 million through a public offering.

The company, which is based in Columbia, Md., plans to use the funds for capital expenditures, working capital and general corporate purposes.

In the transaction, Martek sold about 1.5 million common shares at $49.10 each. It also offered the underwriters a 229,124-share overallotment option. Citigroup Global Markets Inc. in New York is acting as the placement's sole book-running manager. Adams Harkness Inc., of Boston, is acting as co-lead manager, while Needham & Co. Inc., of New York; First Albany Capital Inc., of Albany, N.Y.; and D.A. Davidson & Co., of Great Falls, Mont.; are acting as co-managers.

The stock is expected to be issued Wednesday. On Friday, Martek's stock (NASDAQ:MATK) gained $1.55 to close at $51.44.

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