Just three months after raising $15 million in a private placement, Hollis-Eden Pharmaceuticals Inc. turned to the public markets, bringing in $62.5 million.
The San Diego-based company priced its offering at $25 per share, selling a total of 2.5 million shares.
Jefferies & Co. Inc. and SG Cowen Securities Corp., both of New York, served as managing underwriters and joint book-running managers. They have an overallotment option for 375,000 shares of common stock. The offering is expected to close Oct. 1.
Company officials could not be reached for comment.
The shares offered were pulled from a shelf registration statement filed in July to sell up to 5 million shares. Another 2.5 million shares remain on the shelf.
According to the company's prospectus, it intends to use proceeds from the offering for research and development, as well as general corporate purposes and possibly to invest in businesses, products and technologies that are complementary to its own.
The $15 million private placement in June involved 1.3 million shares sold at $11.42 apiece. (See BioWorld Today, June 23, 2003.)
Just as money from the private placement was earmarked for the development of Hollis-Eden's programs, money raised from the public offering also will likely go toward work on its Immune Regulating Hormones (IRHs). IRHs are designed to direct, through controlling gene expression, the production of cytokines and enzymes that re-regulate immune and metabolic functions toward homeostasis.
Hollis-Eden currently is focusing on three IRHs: HE2100 (Neumune), HE2000 (Immunitin), and HE2200 (Reversionex).
The company announced in April preliminary results from a study in non-human primates that showed Neumune provided protection from whole-body radiation exposure. High levels of radiation can damage a person's bone marrow, resulting in neutropenia and potentially death. Neumune given 24 hours before, or two to four hours after, radiation exposure demonstrated a statistically significant reduction in the occurrence of severe neutropenia, compared to control animals. The product is being developed in conjunction with the U.S. military.
In June, the company formed a collaboration with Cystic Fibrosis Foundation Therapeutics Inc. to study Immunitin in a Phase I/II trial to treat cystic fibrosis. Hollis-Eden was to receive an award from the foundation in the amount of $1.7 million to fund the trial.
Also that month, the company presented data from a Phase II trial of Immunitin in late-stage HIV patients who have progressed to AIDS. Patients in the trial, conducted in South Africa, started with a CD4 count of less than 50. Patients treated with Immunitin experienced a statistically significant reduction in the total number of all opportunistic infections over the 13-month study period when compared to patients receiving placebo.
Hollis-Eden also is studying Immunitin in malaria, tuberculosis and as a protective agent against biowarfare.
The company's third product, Reversionex, is in Phase II trials to treat cardiovascular disease and age-related loss of immunity.
As of July 21, the company had 14.9 million shares outstanding. The public offering would increase the shares outstanding to 17.4 million.
Hollis-Eden's stock (NASDAQ:HEPH) closed Friday at $24.68, down $2.09.