National Editor

Marching ahead with its non-benzodiazepine insomnia drug indiplon, Neurocrine Biosciences Inc. said it priced an offering of 3.75 million shares at $53 per share, for net proceeds of about $200 million.

"This is one of the few deals that has priced at no drop in price from the time of filing," noted Gary Lyons, president and CEO of San Diego-based Neurocrine.

And the offering was oversold: Neurocrine filed earlier this month to sell 3 million shares. "It's been a while since that's happened in this market," Lyons said.

None of the proceeds will go toward indiplon, he said, since development partner Pfizer Inc., of New York, is paying for that. The money will be used for general corporate purposes, according to the company's prospectus.

"It's for commercialization and licensing of marketed products," and otherwise broadening the pipeline, Lyons said.

Neurocrine reported in April that its second of nine planned Phase III studies with indiplon yielded positive results in 200 adult patients with chronic primary insomnia, who got to sleep without next-day effects. (See BioWorld Today, April 23, 2003.)

"Three are complete [now], and the rest will be enrolled at the end of this quarter," Lyons said.

Indiplon, which acts on a specific site of the GABA-A receptor, was licensed in 1998 from DOV Pharmaceuticals Inc., of Fort Lee, N.J.

Neurocrine aims to file a new drug application next year, asking the FDA to approve immediate-release and modified-release formulations of indiplon for sleep disorders including sleep initiation, sleep maintenance, long-term treatment and middle-of-the-night dosing in adult and elderly patients.

The timing could be just right for indiplon. Its main competitor, Ambien (zolpidem tartrate), from Paris-based Sanofi-Synthelabo SA, becomes generic in 2006. Ambien is not approved for sleep maintenance or long-term use, however.

"There's some use outside of [the main indication: short-term management of insomnia], but Ambien isn't a very good drug for sleep maintenance," Lyons said.

Other than Ambien, the field is pretty much open, Lyons said.

"There are a lot of non-sedatives used, the older antidepressants and anti-anxiety drugs," he said. "They're not very good sedatives, but they're approved for long-term treatment."

In Neurocrine's offering, which is pursuant to a shelf registration, the company is granting underwriters an option to buy 562,500 shares of stock within 30 days of the offering to cover overallotments.

Joint book-running managers for the offering are Morgan Stanley and Merrill Lynch & Co., both of New York. Co-managers are Deutsche Bank Securities; UBS Investment Bank; Bear, Stearns & Co.; CIBC World Markets Corp.; Banc of America Securities LLC; and Credit Suisse First Boston, all also of New York.

Neurocrine's stock (NASDAQ:NBIX) closed Friday at $53.29, down 80 cents.