By Randall Osborne

West Coast Editor

On the heels of reporting higher third-quarter profits powered by the 69 percent rise in sales of its arthritis drug Enbrel, Immunex Corp. said Thursday a previously declared equity offering of 60 million shares has begun - 40 million of them by part-owner American Home Products Corp., which will lower AHP's stake in Immunex by more than 10 percent.

"We haven't sold the shares; we've just started to sell them," said Tim Warner, spokesman for Seattle-based Immunex, which is offering 20 million shares. "But it will reduce AHP's ownership to about 43 percent [from about 55 percent]."

At Wednesday's closing price for Immunex (NASDAQ:IMNX) of $46.187, selling 20 million shares would raise $923.74 million for the company, which gets nothing from AHP's stock sale. Immunex had about 503 million shares outstanding Thursday.

If AHP's ownership falls below 43 percent, the company loses a seat on Immunex's board.

Plans for the offering, which was disclosed in August and for which the shelf registration has been made, included the cutback in ownership by AHP; Immunex's purchase of an Enbrel manufacturing facility in Rhode Island; a credit line provided by AHP through third parties for a new research and technology center; and AHP's intent to convert its $450 million of convertible subordinated Immunex notes into 15.5 million shares of common stock. (See BioWorld Today, Aug. 11, 2000.)

"None of that has changed," Warner said. "The only thing is that AHP had told us they were going to convert the $450 million. Now, we've been told they will do it this quarter."

Immunex said it will use its proceeds from the offering to buy and expand the Rhode Island facility and to fund the research and technology center in Seattle, as well as for general purposes and potential acquisitions.

Madison, N.J.-based AHP is granting underwriters an option to buy 9 million more shares as overallotments. Morgan Stanley Dean Witter and Merrill Lynch & Co. will serve as joint lead managers. Co-managers will be Credit Suisse First Boston; Lehman Brothers; Banc of America Securities LLC; Bear, Stearns & Co. Inc.; and Robertson Stephens.

Third-quarter income for Immunex, in line with Wall Street estimates, hit $31.5 million, or 6 cents per share, up from $21 million, or 4 cents per share, in the same period last year. Enbrel sales reached $172.1 million for the quarter ending Sept. 30, as part of the 44 percent rise in revenues to $219 million, up from $152.4 million in the same period last year.

Immunex shares ended Thursday at $44.937, down $1.25. AHP shares (NYSE:AHP) closed at $59.125, down 87 cents.

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