By Matthew Willett
Don't tell Regeneron Pharmaceuticals Inc. the financing window is closed.
The Tarrytown, N.Y., drug discovery company priced 7 million shares at $25 each. Of those, Regeneron sold 6.5 million for proceeds to the company of $162.5 million. The remaining 500,000 shares were offered by a shareholder.
After underwriting discounts and expenses, Regeneron estimates its net proceeds from the offering to be about $153.6 million. It said it will use the funding for preclinical and clinical development projects, research, working capital and other general corporate purposes.
Merrill Lynch & Co., of New York; J.P. Morgan Chase & Co., of New York; and Robertson Stephens Inc., of San Francisco, are underwriting the offering. They have an option to purchase an additional 600,000 shares to cover overallotments, if any.
Regeneron's senior vice president of finance and administration, Murray Goldberg, told BioWorld Today the offering underscored investor interest in the company's pipeline.
"We're very excited at the level of interest we found. That allowed us to sell 7 million shares in a market that has not been generally favorable to biotech recently," Goldberg said. "I think it reflects a wide investor interest in our clinical and research programs, particularly our Axokine product we're developing for obesity and for which we've recently reported favorable Phase II clinical trial results."
Regeneron's stock (NASDAQ:REGN) closed Tuesday at $24.25, down 87.5 cents. That's down nearly $9 from its closing price the day it registered the shares. (See BioWorld Today, Jan. 29, 2001.)
The company had about 43.4 million shares outstanding following the offering.
Regeneron's focus has expanded to include programs to develop therapeutics for the treatment of obesity, rheumatoid arthritis, cancer, allergies, asthma and ischemia. Founded in 1988, its initial thrust was toward degenerative neurological disease therapeutics.
Its technology, the Targeted Genomic and Functionomics technology platforms, discover specific genes of therapeutic interest for a particular disease or cell type. It also uses its Designer Protein Therapeutics platform to genetically engineer product candidates.
Regeneron's pipeline leader is the second-generation ciliary neurotrophic factor Axokine, an anti-obesity drug intended to regulate dietary intake and energy expenditure. In late November, the company reported that 46 percent of patients treated with Axokine lost at least 10 pounds, compared to 5 percent of patients who received only placebo. (See BioWorld Today, Nov. 29, 2000.)
"We hope to initiate a Phase III trial in the middle of the year," Goldberg said of Axokine. "We've got a pegylated version of Axokine, and we plan to initiate a Phase I trial with that second-generation Axokine in the middle of the year."
The company's VEGF Trap, a vascular endothelial growth factor antagonist, is expected to enter the clinic this year, and its angiopoietins, a family of growth factors specific to blood vessels and early hemopoietic stem cells, are in preclinical testing.
Neurotrophin-3, a naturally occurring human protein, is in Phase II testing for treatment of functional constipation.
"We have a VEGF Trap that we also plan on initiating a Phase I trial on in the middle of this year, and a combination IL-4/IL-13 Trap for asthma we're targeting beginning trials on by the end of this year," Goldberg said.
He added the company also has a trial of its IL-1 Trap slated to begin in December, and three other trials expected to go into the clinic this year.
"We're very pleased with the investors," Goldberg concluded. "Some key investors added to their position and some new major institutional investors chose to participate in this offering and helped us expand our institutional investor base." n