Washington Editor

Telik Inc. raised $130 million through a public offering of 6.5 million shares of common stock priced at $20 per share.

Another 1 million were offered in the sale by a corporate selling stockholder, for a total of 7.5 million shares. Telik will not receive any proceeds from those shares. The underwriters will have an option to purchase from the company about 1.1 million shares to cover overallotments, if any.

UBS Securities LLC, of New York, is the sole book-running manager. Co-managers are Lehman Brothers, of New York; Bear, Stearns & Co. Inc., of New York; Needham & Co. Inc., of New York; and Lazard and Fortis Securities.

Company officials could not comment because of SEC-imposed quiet period rules. Telik's stock (NASDAQ:TELK) rose 59 cents Thursday to end the day at $20.81.

As of Sept. 30, Telik had $69.1 million in cash, cash equivalents and investments, including restricted investments, compared to $104.3 million Dec. 31.

In its third-quarter financial results, the company reported a net loss of $13.1 million, or 37 cents per share for the period ended Sept. 30, compared with a net loss of $7.8 million, or 28 cents per share, for the comparable period in 2002.

The increase in the net loss was attributed to higher research and development costs, the company said, which reported $10.7 million in such spending during the third quarter. Specifically, the company said the increase was associated with the expansion of the Telcyta (TLK286) program, which has been granted FDA fast-track status in ovarian cancer.

Little more than a year ago, the company, located in Palo Alto, Calif., raised $74.75 million through the sale of 6.5 million shares at $11.50 per share. (See BioWorld Today, Sept. 30, 2002.)

According to its prospectus, Telik plans to use proceeds from the offering to fund clinical trials of Telcyta and Telintra, and for other general corporate purposes.

Telik initiated a Phase III registration trial of Telcyta in ovarian cancer in March, and plans to initiate a Phase III trial of the candidate in non-small-cell lung cancer in 2004. (See BioWorld Today, Oct. 2, 2003.)

The company also is conducting additional trials of Telcyta in non-small-cell lung, ovarian and breast cancer.

Telcyta is designed to trigger apoptosis when activated by glutathione S-transferase P1-1, an enzyme overexpressed in many human cancers. Higher levels of GST P1-1 also correlate with chemotherapeutic drug resistance.

Behind Telcyta in the pipeline, Telik is studying Telintra (TLK199) in myelodysplastic syndrome, a form of pre-leukemia.

Telik has selected TLK 19781 as its next product candidate, to be studied for Type II diabetes. Assuming a successful completion of preclinical safety studies, the company intends to file an investigational new drug application in the second half of 2004.

The company discovered its product candidates using its proprietary drug discovery technology, TRAP, which enables discovery of small-molecule drug candidates.

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