National Editor

Having lowered the price of its initial public offering, liver-drug company Metabasis Therapeutics Inc. raised $35 million by selling 5 million shares at $7 per share - even less than the lowered range of $8 to $9 per share.

The company's stock (NASDAQ:MBRX) closed Wednesday at $6.66, after climbing as high as $7.13.

When it filed the IPO in February, San Diego-based Metabasis hoped to raise as much as $86.25 million, but earlier this month, underwriters cut the estimated price range from $11 to $13 per share and reduced the number of shares offered from 6 million to 5 million. (See BioWorld Today, Feb. 4, 2004.)

Still in the SEC-imposed quiet period, Metabasis said in a prospectus that it would use proceeds for research and development activities, as well as for in-licensing efforts and general purposes.

The company has glucose pathway inhibitor CS-917, being developed in a deal with Tokyo-based Sankyo Co. Ltd., in a Phase II dose-finding trial in Type II diabetes. Remofovir (formerly known as Hepavir B) - which uses Metabasis' HepDirect technology to target the active form of marketed Hepsera with lower toxicity - is in Phase I/II trials for hepatitis B. The drug is being developed in collaboration with Costa Mesa, Calif.-based Valeant Pharmaceuticals International Inc., which has licensed worldwide rights.

HepDirect technology also is deployed in MB07133 for primary liver cancer. Metabasis holds exclusive worldwide commercialization rights to the drug, which is in a Phase I/II study that aims the active form of the cancer drug araC specifically at the liver. The company raised $24.9 million last fall in a private placement to be spent mainly on MB07133. (See BioWorld Today, Oct. 30, 2003.)

Underwriters in the IPO have a 30-day option to purchase up to an additional 750,000 shares to cover overallotments. New York-based SG Cowen Securities Corp. is serving as the offering's sole bookrunner. Deutsche Bank Securities Inc., also of New York, is acting as co-lead manager, with co-managers San Francisco-based Thomas Weisel Partners LLC and Baltimore-based Legg Mason Wood Walker Inc.

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