By Brady Huggett
NeoPharm Inc. completed a $106.5 million public offering, nearly double the proceeds that would have come in had the offering gone off at the stock price when the registration was disclosed in late August.
The offering included 3.2 million shares sold at $35.50 each, with 3 million shares being offered by the company and another 200,000 offered by a selling stockholder. Prudential Vector Healthcare Group, of New York, was lead manager and U.S. Bancorp Piper Jaffray Inc., of Minneapolis, acted as co-manager. They have an overallotment option on another 450,000 shares.
NeoPharm, of Bannockburn, Ill., filed in August to sell 2.8 million shares, when the stock opened at trading at $19.375, which would have raised about $55 million. NeoPharm's stock (NASDAQ:NEOL) closed at $37.625 Tuesday, down about 12.5 cents. (See BioWorld Today, Aug. 8, 2000, p. 1.)
The company said it will use the proceeds to finance product development activities and clinical trials, the commercialization of its products, the development of a sales force in the United States, the acquisition of complementary products, technologies or businesses and capital expenditures, and for working capital and general corporate purposes.
NeoPharm has seven cancer compounds in various stages of development. Its drug products platform is twofold: electrostatic liposome drug delivery and tumor-targeting fusion proteins. In July, it filed an new drug application for Liposomal Encapsulated Antisense Oligonucleotide (LE-AON), the first product to deliver antisense oligonucleotides in liposomes. It is designed to modulate the functioning of the c-raf-1 oncogene by inhibiting production of proteins responsible for radiation resistance. LE-AON has demonstrated activity in tumors resistant to radiation in animal trials. NeoPharm's leading tumor-targeting product, IL13-PE38, is designed to attack tumors in kidney and brain cancers.
The company had $25.3 million in cash on June 30 and will have 14.3 million shares outstanding following the sale. This offering represents roughly 22 percent of the company's stock.