Metabasis Therapeutics Inc. is looking to go public.

A liver disease drug developer, the San Diego-based firm filed a registration statement with the SEC related to a proposed $86.25 million initial public offering. The company has not disclosed the number of shares it plans to sell or their price range, but proposed the symbol "MBRX" for the Nasdaq exchange.

In its prospectus, Metabasis said it would use proceeds to continue and expand research and development activities, including clinical trials for current product candidates and further development of its pipeline. The company also would use funds to acquire or in-license products, technologies or businesses, and for other working capital and general corporate purposes.

Among Metabasis' programs, the 81-employee company is developing CS-917 for Type II diabetes. Currently in a Phase II trial dose-finding trial, prior Phase II data demonstrated the compound's capability in lowering blood glucose levels. CS-917, which is designed to inhibit a metabolic pathway in the liver that is responsible for producing glucose, is being developed in collaboration with Tokyo-based Sankyo Co. Ltd. Metabasis retains co-promotion rights in North America.

Another product, Hepavir B, is in Phase I/II trials for hepatitis B. It uses the company's HepDirect technology to target the active form of Hepsera, a marketed antiviral drug for hepatitis B, with less toxic side effects. Hepavir B is being developed in collaboration with Costa Mesa, Calif.-based Valeant Pharmaceuticals International, which has a license to the product's worldwide rights.

Metabasis has exclusive worldwide commercialization rights to MB07133, a product candidate in a Phase I/II study for primary liver cancer. It uses HepDirect to target the active form of araC, a marketed cancer drug, to the liver while decreasing levels of the active form of the drug in tissues outside the organ.

Metabasis recently raised $24.9 million through a private placement. The company earmarked the funds primarily for MB07133, though a portion of the proceeds will be directed toward developing a second-generation gluconeogenesis inhibitor for Type II diabetes. The latter product follows CS-917, and also is the subject of a collaborative arrangement with Sankyo. (See BioWorld Today, Oct. 30, 2002, and Oct. 30, 2003.)

The company's primary shareholder, Boston-based MPM Capital LP, controls 30.5 percent of its stock. Other large institutional holders include InterWest Management Partners VII LLC, of Menlo Park, Calif., with 18.8 percent; Sicor Inc. (acquired by Teva Pharmaceuticals Industries Ltd.) , of Irvine, Calif., with 16.5 percent; Sprout Capital IX LP, also of Menlo Park, with 14.5 percent; and Maverick Capital Ltd., of Dallas, with 6.2 percent. Metabasis was spun out of Gensia Sicor Inc. in 1999.

Other shareholders of note include the company's founders, Paul Laikind, Mark Erion and John Beck. Laikind, who serves as chairman, president and CEO, controls 6 percent. Erion, its executive vice president of research and development, has a 5.5 percent stake. Beck, the company's vice president of finance, chief financial officer and treasurer, has a 2.2 percent share in Metabasis.

New York-based SG Cowen Securities Corp. will act as the offering's sole bookrunner. Deutsche Bank Securities Inc., also of New York, is acting as co-lead manager, with San Francisco-based Thomas Weisel Partners LLC and Baltimore-based Legg Mason Wood Walker Inc. acting as co-managers.

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