By Brady Huggett
On the day following the FDA's acceptance of Praecis Pharmaceuticals Inc.'s new drug application for its abarelix depot prostate cancer drug, the company filed a registration statement with the SEC to offer up to 5.5 million shares of common stock, which would be worth about $170 million based on Thursday's closing price of $30.875.
Praecis' stock (NASDAQ:PRCS) dropped $1.50 Friday, or about 6 percent, to close at $29.375. However, the stock closed Wednesday at $28.125 before the FDA acceptance news Thursday. Praecis has about 41.9 million shares outstanding, excluding the offering.
Salomon Smith Barney Inc., Credit Suisse First Boston Corp. and CIBC World Markets Corp., all of New York, are underwriting the offering and have an option to purchase 825,000 additional shares to cover overallotments. Company officials were unable to comment on the offering.
The FDA, beyond accepting the filing of abarelix depot for the hormonal treatment of prostate cancer, granted it priority review, meaning the FDA has six months to respond to the application. Praecis said the review should be completed by June 12, unless the FDA asks for additional information. The product is partnered with Amgen Inc., of Thousand Oaks, Calif., and Sanofi-Synthelabo, of Paris.
Praecis, of Cambridge, Mass., has three proprietary technologies: LEAP, Ligand Evolution to Active Pharmaceuticals, a drug-discovery method that combines a biological selection with the favorable drug-like properties added using medicinal chemistry; REL-EASE drug delivery technology, a delivery depot system for abarelix depot that also is applicable to other molecules; and Alzheimer's Assays, amyloid aggregation inhibition assays that measure the aggregation of beta-amyloid and the ability of inhibitors to affect beta-amyloid aggregation.
Abarelix depot for prostate cancer sits at the top of Praecis' pipeline, but the company has other products, including another indication for abarelix depot, beneath it.
Abarelix depot for endometriosis is in Phase II/III trials, also partnered with Amgen and Sanofi-Synthelabo. Praecis also has Latranal, for chronic back pain, in Phase II; Apan, for Alzheimer's disease, in Phase I; a CCR5 antagonist, for HIV and partnered with Human Genome Sciences Inc., of Rockville, Md., in research; and NKFB, for inflammation, also in research.
Separately, Praecis released its fourth-quarter and year-end financial results. For the year, the company posted a net loss of about $28.7 million, compared to a net income of $9.2 million in 1999. It attributed the net loss to the expansion of its clinical programs in 2000, including increasing spending for the development of abarelix depot for the treatment of endometriosis. Additionally, it increased its spending on its clinical development programs for Latranal and Apan. As of Dec. 31, it had $132 million in cash and cash equivalents.