Aradigm Corp. raised $13.5 million after completing a private placement of its discounted shares.

The Hayward, Calif.-based company said it would use net proceeds to further develop its programs, including those involving its AERx and Intraject delivery technologies, and for working capital and general corporate purposes. Both technologies use liquid drug formulations to deliver drugs to targeted areas of the lung or systemic circulation.

In the agreement, which priced Nov. 7, Aradigm sold about 7.5 million shares at $1.80 apiece - a 16 percent markdown to the Nasdaq price on the commitment date. The financing included many of the participants in Aradigm's March private placement.

That agreement raised $15 million through the sale of about 19 million shares at 79 cents apiece. Investors included New Enterprise Associates and Special Situations Fund, as well as members of Aradigm's senior management. It originally was announced a month before. (See BioWorld Today, Feb. 13, 2002.)

As part of the latest agreement, the company also will issue warrants for about 1.9 million additional shares at $2.50 apiece, a 17 percent premium to the Nov. 7 price. The warrants have a cash-only exercise provision, subject to certain exceptions. New York-based SG Cowen Securities Corp. acted as the transaction's exclusive placement agent.

The company's recently reported third-quarter results for the period ended Sept. 30 showed a narrowed net loss to $4.5 million, compared to a $10.3 million loss for the same period last year. Aradigm also reported $14.3 million in cash, cash equivalents and all investments as of that date, as well as about 54.3 million shares outstanding.

The financial report also included quarterly contract revenues of $9.8 million, with the majority stemming from a collaboration with Bagsvaerd, Denmark-based Novo Nordisk A/S to develop the AERx insulin diabetes management system. The product is in a Phase III program.

Aradigm's stock (NASDAQ:ARDM) dropped 11 cents Tuesday to close at $2.11.