By Mary Welch

SignalGene Inc. filed a preliminary short-form prospectus to raise C$20 million (U.S.$13.35 million), with the proceeds earmarked to fund the advancement of its discovery research programs, the broadening of its technology platform and the expansion of its business development activities.

The syndicate of underwriters is led by BMO Nesbitt Burns Inc., of Toronto, and includes National Bank Financial Inc. and Yorkton Securities Inc., both of Toronto.

Montreal-based SignalGene has five discovery programs under way, in breast cancer, Alzheimer's disease, osteoporosis, obesity and psoriasis. Last year it entered into a collaborative agreement with the Office of Technology Transfer of McGill University for a project aimed at understanding the role of nuclear receptors in complex genetic diseases, such as diabetes and obesity. SignalGene invested more than $250,000 in the project.

In March the company completed its acquisition of GeneScape Inc., of Mississauga, Ontario, with the exchange of 6.6 million new common shares. Earlier this month it signed a letter of intent to acquire the outstanding shares of Nanodesign, a computer-aided drug design company located in Guelph, Ontario. The transaction, expected to close by June 20, is valued at C$15 million (US$10.1 million). It will involve the issue of about 5.7 million common shares of SGI.

SignalGene officials could not be reached for comment. SignalGene's stock (TSE:SGI) gained C$.01 to close at C$2.08.