By Matthew Willett

BioNumerik, whose lead product candidate could relieve chemotherapeutic-associated side effects including nerve and kidney damage, filed for a $50 million initial public offering (IPO) Monday.

Morgan Stanley Dean Witter & Co., of New York; UBS Warburg LLC, of Stamford, Conn.; and SG Cowen Securities Corp., of New York, are underwriting the IPO.

The number of shares to be offered and the price have not been determined, and San Antonio-based BioNumerik claimed general corporate purposes as the designated use for the funds in its registration prospectus. With an anticancer drug in multiple studies, clinical trial expenses could take a big share of the proceeds.

BioNumerik's lead drug, BNP7787, is FDA fast-tracked for treatment of side effects from taxane and platinum-based drugs, especially nerve and kidney damage. It is expected to enter a pivotal Phase III trial in the second quarter, and the company plans to initiate at least one Phase III trial in Europe this year.

Its next most advanced drug candidate, a camptothecin designated BNP 1350, a member of a class the company calls karenitecins, should enter Phase II testing against various types of solid tumors this year. BioNumerik said the drug, which is formulated to avoid the serious side effects common to camptothecins, is currently in Phase I testing.

Following BNP 1350, MDAM, a drug the company hopes acts similarly to the anticancer/anti-inflammatory therapeutic methotrexate, completed one Phase I trial, and the company expects the drug to complete further Phase I testing this year.

The company anticipates trading under the symbol "BNPI" on Nasdaq. Founded in May 1992, BioNumerik said it uses a "mechanism-based" approach to drug discovery and focuses on small-molecule anticancer therapeutics.

The company said this multidisciplinal approach to drug discovery, which incorporates physics, chemistry and high-throughput screening with X-ray crystallography-aided rational drug design to identify and understand drug and target mechanisms of action, increases efficiency in drug design and facilitates the development of potentially more powerful drugs.

BioNumerik said that points of possible failure - from chemistry to formulation, toxicology, delivery, metabolism and manufacturing - can be dealt with concurrently, rather than as separate steps in the development process.

The company accomplishes this concurrent development using two Cray supercomputers capable of conducting 55 billion mathematical operations and holding about 1.5 terabytes, or 1.5 trillion bytes, of information. BioNumerik uses the computers, which it owns, through a 1998 expansion of its 1994 beta testing agreement with Cray Inc.

As of the end of 2000, the company had about $18 million in cash, cash equivalents and marketable securities. The company raised $12 million in a self-managed private placement last April. It expanded its deal for BNP7787 development at the same time, taking funding from its partner Grelan Pharmaceutical Co., of Tokyo, to support research for further uses of the drug candidate and taking a $2 million equity investment. (See BioWorld Today, April 8, 2000.)

The original deal, entered in 1996, was for development and commercialization of BNP7787 in Japan.

In November, BioNumerik and Grelan formed a joint venture, KI Pharmaceuticals LLC, to expand BioNumerik's Asian presence.

In January, the company sold development, marketing and commercialization rights for BNP7787 outside the U.S., Japan and Canada to ASTA Medica AG, of Frankfurt, Germany, for a $15 million up-front payment and royalties.

BioNumerik is owned largely by CEO and chairman Frederick Hausheer, whose 31.3 percent pre-offering stake dwarfs the portion held by other owners. Director James Leininger owns 8.4 percent of the company, and Bioven Partners, L.P., of Fredricksburg, Texas, owns 7.2 percent.