By Matthew Willett

Neurocrine Biosciences Inc. put $90 million in the bank through an offering of 3 million shares, funding the company plans to use for clinical research advancement.

The shares sold at $30 apiece. Neurocrine's shares (NASDAQ:NBIX) fell $1.375 Thursday to close at $28.875.

The offering was co-led by Robertson Stephens and Solomon Smith Barney Inc., both of New York. Underwriters were granted the option to purchase an additional 450,000 shares to cover overallotments.

Neurocrine President and CEO Gary Lyons said the aim of the financing was to keep programs in house for as long as possible, hopefully, through commercialization. He said the clinical programs helped get the offering through in an uncertain market.

"I consider it went off well in a difficult environment for raising money," Lyons told BioWorld Today. "Given the political uncertainty and high-tech earnings being under pressure, for it to price on a day that the Nasdaq sets a record was a good thing. The underwriters did a superior job, and I think investors were interested in a company with late-stage clinical research. That's one reason the company bucked the trend."

Neurocrine has about 25 million shares outstanding, including the shares sold in this offering. As of Sept. 30 the company had about $79.45 million in cash, cash equivalents and marketable securities.

The San Diego-based company focuses its discovery efforts at treatments for neurologic and endocrinic disorders, and currently has 15 programs in various stages of development.

Its most advanced drug candidate, NBI-34060 for treatment of insomnia, completed a Phase II placebo-controlled, 228-patient efficacy trial in November 1999, and the company is enrolling patients for additional Phase II trials. Phase III pivotal trials also are being planned for that compound, and the company expects those trials to begin in the second half of 2001.

Another neurotherapeutic, a corticotropin-releasing factor (CRF) compound, is in preclinical development. A similar compound is licensed to Janssen Pharmaceutica, a unit of Johnson & Johnson. Due to adverse side effects, however, Janssen discontinued development of the original compound in favor of a preclinical backup.

"We want to keep the insomnia program and move it into Phase III," Lyons said. "We want to keep our CRF compound for anxiety and depression through early Phase III to validate the mechanism of treatment for anxiety and depression, and at that point seek a corporate partner for development and commercialization."

Neurocrine's drug candidate in brain cancer, NBI-3001 for treatment of glioblastoma, completed a safety and efficacy trial in February, and the company plans to begin a second trial to establish dosing by the end of the year and a Phase III trial in mid-2001.

NBI-5788, Neurocrine's multiple sclerosis immunotherapeutic, is awaiting the beginning of a dose-ranging trial following a preliminary safety and efficacy trial.

A 20-patient trial of the Type I diabetic therapeutic NBI-6024 showed the compound safe and well tolerated, and a 30-patient, dose-ranging safety trial is under way. The company plans to initiate several Phase II trials of NBI-6024 next year.

That compound's development is a collaborative effort with Taisho Pharmaceutical Ltd., of Tokyo.

Lyons called the company's anticancer gonadotropin-releasing hormone small-molecule antagonist one of the promising candidates that Neurocrine would like to keep through at least Phase II.

"This is a compound for prostate cancer, endometriosis and fibrosis, and I think it's got a very high probability of success. We want to keep it through Phase II, and being well funded we can hire enough to staff that program accordingly," he said.

The $90 million capital infusion should be sufficient to move all the clinical programs ahead, he added.

"At the end of the third quarter we had about $80 million in cash, and with gross proceeds of $90 million, that puts us at about $160 million for a cash position," Lyons said. "We expect the burn rate to increase moderately from the previous year, but not too extensively. This cash should last us for some time.

"Now, with this financing, we have the financial wherewithal to continue the plan. We'll have a lot of news over the next 12 months related to clinical activity and new partnerships."