With its fast-track treatment for traumatic brain injury in Phase III trials, Pharmos Corp. priced its public offering of 10.5 million shares at $2.75 each, which means net proceeds to the company of about $27 million.
The company's stock (NASDAQ:PARS) closed Monday, the day before the pricing was disclosed, at $3.01, and ended Tuesday at $2.40, down 11 cents.
Gale Smith, director of corporate development for Iselin, N.J.-based Pharmos, told BioWorld Today the company could not comment until the transaction is completed, which is expected to happen Friday.
The offering is being made from a shelf registration statement filed in November and declared effective the following month. The company will file a final prospectus later, but the original prospectus said proceeds from the shelf offering would be used for general corporate purposes, research and product development activities (potentially including the acquisition of new technologies), preclinical studies and clinical trials, and equipment.
This fall, Pharmos raised $21 million through a convertible debt financing with six institutional investors and said it planned to use more than two-thirds of the proceeds for compound acquisitions. (See BioWorld Today, Oct. 1, 2003.)
The lead product is dexanabinol, a tricyclic dextrocannabinoid in Phase III trials for traumatic brain injury, which works by blocking the synthesis of pro-inflammatory cytokines in the injured brain, thus slowing the breakdown of the blood-brain barrier and cellular death via apoptosis and necrosis. (See BioWorld Today, Jan. 11, 2001.)
Dexanabinol also is an N-methyl-D-aspartate receptor antagonist that prevents the influx of calcium ions into the cells of the injured brain and functions as an antioxidant. In October, Pharmos had slightly more than 700 patients enrolled and was aiming for 900.
C.E. Unterberg, Towbin, of Denver, and Harris Nesbitt Gerard, of New York, are acting as underwriters for the offering. They have been granted by Pharmos a 30-day option to buy about 1.6 million more shares to cover overallotments.