It may have been a day filled with pranks, cranks and guffaws, but there was no fooling around at Santarus Inc.'s offices in San Diego on Thursday.

The company celebrated April 1 by raising $54 million in its initial public offering, pricing 6 million shares at $9 each.

While the company remained in an SEC-imposed quiet period and could not comment, the prospectus said funds would be used to manufacture and market Rapinex powder for suspension if it is approved. The money also will help the company build its sales and marketing capabilities, and it will help cover further clinical trials, regulatory submissions and development of its other product candidates. Remaining net proceeds would be used for general corporate purposes, and to acquire complementary products, technologies or businesses.

The company expects to receive $48.3 million in net proceeds, not including the overallotment option, which would last the company for at least 12 months.

Trading on the Nasdaq National Market under the symbol "SNTS," the company's shares rose $1.10 Thursday, or 12.2 percent, to close at $10.10. Following the IPO, the company has 28.3 million shares outstanding.

Lead underwriters for the IPO were SG Cowen Securities Corp. and UBS Securities LLC, both of New York. Thomas Weisel Partners, of San Francisco, and RBC Capital Markets, of Toronto, served as co-managers. The underwriters have an overallotment option for an additional 900,000 shares.

As a specialty pharmaceutical company, Santarus focuses on in-licensing and developing products to prevent and treat gastrointestinal (GI) diseases and disorders. The company is developing next-generation proton pump inhibitor (PPI) products. The PPI market, which includes five delayed-release PPI brands, had U.S. sales of $12.9 billion in 2003, according to an independent pharmaceutical market research firm, the company said in its prospectus.

The company has three product candidates, Rapinex powder for suspension, Rapinex capsule and Rapinex chewable tablet - all immediate-release formulations of omeprazole. The products are designed to treat and prevent heartburn, gastroesophageal reflux disease (GERD), erosive esophagitis (EE), upper GI bleeding and peptic ulcer diseases. Current PPI products are available only in delayed-release and enteric-coated formulations. Enteric coating protects the PPI from acid degradation, but it also delays the onset of action. Santarus believes its product candidates can reduce gastric acidity, but maintain a therapeutic effect.

Rapinex powder uses an antacid instead of an enteric coating to neutralize acid in the esophagus and stomach. Santarus submitted its first new drug application in August for Rapinex powder 20 mg, and its second NDA in February for the product at 40 mg. With the 20-mg dose, the company is seeking approval of initial indications to treat heartburn, EE and duodenal ulcer, and symptoms related to GERD. With the 40-mg dose, it is seeking approval to use it as a prevention of upper GI bleeding and the treatment of gastric ulcers.

The NDA filings include data from Santarus' pivotal Phase III trial with 359 critically ill patients with upper GI bleeding at 50 sites evaluating Rapinex powder at 40 mg. The drug hit its primary endpoint in August. (See BioWorld Today, Aug. 7, 2003.)

As for the other two product candidates - Rapinex capsule and Rapinex chewable tablet - the company is developing formulations to use in pivotal trials to begin this year.

More than three years ago, Santarus licensed exclusive, worldwide rights from the University of Missouri to patents and patent applications covering specific formulations of immediate-release PPIs and antacids. The initial U.S. patents on which the product candidates are based expire in July 2016.

In June 2002, Santarus granted TAP Pharmaceutical Products Inc., of Lake Forest, Ill., the North American rights to develop, manufacture and sell products resulting from the use of Santarus' immediate-release PPI technology with lansoprazole - TAP's PPI sold under the brand name Prevacid. Santarus received an up-front fee of $8 million for the agreement, and it is entitled to more than $100 million in milestone payments, as well as potential royalties. TAP is responsible for all development and commercialization expenses. The 2003 sales of Prevacid in North America were about $4 billion. (See BioWorld Today, July 10, 2002.)

The company, which was founded in 1996, plans to expand its sales force to promote products in the U.S. It also will partner to develop and promote its products in the U.S. and internationally, and it will build its portfolio through internal development and in-licensing deals.

As of Dec. 31, Santarus had cash, cash equivalents and short-term investments of $45.6 million.