By Mary Welch

The cruel realities of a tough financial climate hit five more companies as Avigen Inc. raised $26 million (down considerably from its original intent of $293 million); Adolor Corp., Drug Abuse Sciences Inc. and Rigel Pharmaceuticals Inc. all withdrew their initial public offerings; and EntreMed Inc. canceled its follow-on offering.

Avigen, based in Alameda, Calif., sold 1 million shares at $26 each. However, the company filed to sell 4 million shares in the hopes or raising $292.7 million, with the proceeds going toward funding its three primary programs in hemophilia A and B, and in Gaucher disease. At the time of the offering, Avigen¿s stock was at $66.681. (See BioWorld Today, Feb. 22, 2000, p. 1.)

Avigen¿s stock (NASDAQ:AVGN) closed Thursday at $26.50, down $3.312.

CIBC World Markets Corp., Solomon Smith Barney Inc. and ING Barings LLC, all of New York, managed the offering.

¿I¿d like to think the biotech market has bottomed out and will turn around,¿ said Tom Paulson, vice president of finance and chief financial officer for Avigen. ¿Hope springs eternal. I think we missed the real open window period by two weeks.¿

Still, Paulson is pleased with the results. ¿Even though we cut back the offering, the company is better off with the reduced deal than not having the deal go through. We increased our financial resources by 50 percent and placed the shares with three great institutional holders. In this market it¿s a challenge to raise capital, and being able to do so is a testimony to the progress this company has made.¿

With this offering, Avigen has a little more than $70 million in the bank and 16.3 million shares outstanding.

Avigen develops gene therapy products to treat inherited diseases. Each product is based on its adeno-associated virus (AAV) vector technology to deliver DNA to patients with genetic diseases. The company believes its AAV vectors can be used to deliver genes for the treatment of hemophilia A and B, Gaucher¿s disease, hereditary emphysema and beta-thalassemia.

Adolor Corp. had planned to raise between $72 million and $84 million, with the proceeds earmarked for clinical trials of its various pain management products. The Malvern, Pa.-based company intended to offer 6 million shares of stock at a proposed price range of $12 to $14 per share. (See BioWorld Today, Feb. 9, 2000, p. 1.)

Warburg Dillon Read LLC, of New York, was the lead underwriter, with Robertson Stephens and Pacific Growth Equities, both of San Francisco, participating.

Adolor¿s products are for the treatment of pain and the side effects that are caused by current narcotic pain treatments. Its research is focused on two of the three opioid receptor types, mu and kappa, found in the peripheral nervous system. The analgesic product candidates are designed to treat moderate to severe pain and itch.

The company also is developing products to reduce the most prevalent and severe side effects of current narcotics, such as bowel dysfunction, nausea and sedation. Since most of the product candidates target peripheral opioid receptors, they should not exhibit the dose-limiting central nervous system side effects of existing narcotics, the company said.

Adolor¿s lead candidate, ADL 8-2698, is a peripherally acting, gastrointestinal tract-restricted mu opioid receptor antagonist. It is in three Phase II/III trials evaluating efficacy for narcotic bowel dysfunction.

Drug Abuse Sciences Inc., of Menlo Park, Calif., and Paris, sought $69 million, with the proceeds going to developing therapies for drug and alcohol abusers. Warburg Dillon Read was the lead underwriter; Robertson Stephens was the co-manager.

The company is developing three products ¿ Naltrel, Buprel and Methaliz ¿ to improve existing medications. Other product candidates are intended to treat patients suffering from cocaine and methamphetamine overdose and addiction.

The company expects to start pivotal trials with Naltrel, a slow-release version of Naltrexone, a heroin antagonist, for the treatment of alcohol and heroin dependence this year. In the next 18 months, clinical trials are expected to start with Buprel and Methaliz for the treatment of severe heroin dependence. Another compound, COC-Ab, an antidote for treating the effects of cocaine overdose, also is expected to start clinical trials this year. (See BioWorld Today, Nov. 5, 1999, p. 1.)

A post-genomics combinatorial biology company, Rigel Pharmaceuticals originally sought $100 million, with the proceeds going toward increasing the company¿s capitalization and financial flexibility. (See BioWorldToday, Feb. 7, 2000, p. 1.)

¿We withdrew because of unfavorable market conditions,¿ said Brian Cunningham, Rigel¿s chief financial officer and chief operating officer. ¿We will come back at some point. Fortunately, we are not like some other companies that are out of the market and out of money. We did a financing prior to the offering. Right now we¿ll pay attention to our business and wait until the market improves, but we¿re not putting a time frame on it.¿

Rigel, like so many of the other firms, initially found a warm reception that quickly turned cold.

¿We had very nice feedback on the road show,¿ Cunningham said. ¿Just not a check.¿

The offering was being made through an underwriting group led by Warburg Dillon Read, with Robertson Stephens and Prudential Vector Healthcare Group, of New York, serving as co-managers.

Rigel finds novel drug targets and validates the role of these targets in disease without first knowing the identity or sequence of the genes involved. The company identifies targets for drug development by creating a disease-like setting that can detect a change in the cellular response.

In its first three years of research, Rigel said it identified 15 new drug targets in seven of its nine programs and generated preclinical candidate compounds in its anti-immunoglobulin E (IgE) mast cell, IgE B-cell and E-3 ubiquitin ligase programs. It has programs in asthma/allergy, autoimmunity, transplant rejection, rheumatoid arthritis/ inflammatory bowel disease and tumor growth.

EntreMed withdrew its plan to sell 2 million shares of stock. At the time of the SEC filing, EntreMed¿s stock was at $59.875, which would have yielded about $119.7 million. (See BioWorld Today, March 31, 2000, p. 1.)

EntreMed¿s stock (NASDAQ:ENMD) closed Thursday at $41, down $6.125.

The offering was to be jointly managed by Banc of America Securities LLC, of San Francisco, and Warburg Dillon Read, with Gerard Klauer Mattison & Co., of New York, acting as co-manager.

EntreMed, of Rockville, Md., would have used the money to fund clinical trials for three drugs. Its endostatin protein entered Phase I in September for solid tumors and lymphomas. Due to start any day now in Phase I trials is 2-methoxyestradiol (2ME2) in patients with advanced breast cancer. Phase I trials of angiostatin for cancer just started.

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