By Matthew Willett

Rigel Pharmaceuticals Inc. priced its belated public offering for millions less than anticipated, offering 5 million shares at $7 each for proceeds of $35 million, well short of the total the company anticipated when it filed in February.

Rigel, of South San Francisco, pulled its $100 million February offering and re-filed in September, offering 9 million shares at between $8 and $10 apiece. (See BioWorld Today, Feb. 7, 2000; and Sept. 18, 2000.)

Market favor still wouldn't shine over the post-genomics protein miner, which dropped its share price range to $7 to $8 and cut its offering by 4 million shares earlier this month.

Rigel did concurrently place 1.43 million additional shares privately with Novartis AG, of Basel, Switzerland, for another $10 million in proceeds.

Rigel's stock (NASDAQ:RIGL) gained 10.9 cents Wednesday to close at $7.109. The company said it plans to use the money to fund research and development activities, possible acquisitions and technology investments, possible facility expansion and general corporate purposes.

The offering was led by underwriter Morgan Stanley Dean Witter and co-managed by Lehman Brothers and Robertson Stephens.

Rigel granted underwriters the option of purchasing an additional 750,000 shares to cover overallotments. After the offering, Rigel has about 35.9 million shares outstanding.

Rigel raised $15.1 million in February through a private placement of about 2.5 million shares. As of Sept. 30, Rigel had $11 million in cash, cash equivalents and marketable securities.

The company develops small-molecule drugs using combinatorial biology, high-throughput fluorescent cell sorters and protein-protein interaction mapping. It has programs in autoimmune disease, asthma, allergies, transplant rejection, rheumatoid arthritis, tumor growth, hepatitis C and inflammatory bowel disease.

Rigel has used its technology to identify 23 novel drug targets to date, and its most advanced program, a small-molecule IgE receptor inhibitor for treatment of asthma, is in preclinical study.

Rigel has formed drug discovery collaborations for six of its 10 programs, including a December 1998 agreement with Janssen Pharmaceutica, of Beerse, Belgium, for oncology therapeutics and diagnostics, and a January 1999 alliance with Pfizer Inc., of New York, for asthma and allergy therapeutics.

It also has three collaborative agreements with Novartis relating to immunology, and one with Cell Genesys Inc., of Foster City, Calif., focused on angiogenesis. Rigel also has collaborated with Neurocrine Biosciences Inc., of San Diego, for rights to small chemical compounds.