By Matthew Willett
Alteon Inc. filed for the sale of up to $50 million in shares Monday on the heels of its fourth-quarter and annual earnings reports, which detailed the company's improved annual net loss of 63 cents per share.
The company said it planned to use proceeds from the shelf registration for working capital and general corporate purposes.
In September, Alteon completed a private placement, placing 2.8 million shares and warrants to purchase 1.1 million shares at an aggregate purchase price of $6.2 million. The exercise price of the warrants is $3.40 per share, and they carry a term of seven years.
Alteon, of Ramsey, N.J., focuses its drug discovery efforts on developing oral therapeutics for diabetes and diabetes of aging through its understanding of the advanced glycosylation end-product (A.G.E.) pathway.
Alteon's research and development efforts aim at using A.G.E. crosslink breakers between proteins in order to reverse damage, utilizing A.G.E.-formation inhibitors to prevent or inhibit A.G.E. production, and reducing A.G.E. in patients using a novel class of hyperglycemic agents called glucose-lowering agents.
Its lead product, the A.G.E. crosslink breaker ALT-711, is under development for treatment of cardiovascular disease. The company said results from its Phase IIa 93-patient, placebo-controlled safety, efficacy and pharmacology trial of ALT-711 indicated patients who received ALT-711 experienced a statistically significant (p=0.05) reduction in pulse pressure.
Its second clinical program focuses on an A.G.E. formation inhibitor, pimagedine. That compound, under development as a treatment for diabetic nephropathy, completed a Phase II/III that indicated the compound had efficacy in reducing the risk of death and the risk of doubling serum creatinine, in addition to statistically significantly reducing the progression of retinopathy.
According to its earnings release on Monday, the company had about $10 million in cash, cash equivalents and short-term investments at the end of 2000. Alteon also disclosed revenues for 2000 of $570,000 and a net loss of $9.6 million, or 63 cents per share. That compares to a net loss of 72 cents per share, or $13.6 million, in 1999.
Alteon said its net loss applicable to common shareholders decreased primarily as a result of decreased research and development expenses.
Alteon currently has 22.4 million shares outstanding. Its stock (AMEX:ALT) rose 60 cents Monday, or 14 percent, to close at $4.90.