By Lisa Seachrist

Washington Editor

Regeneron Pharmaceuticals Inc. raised $77.35 million in a public offering of 2.6 million shares of common stock to advance its clinical and preclinical programs.

The offering was scaled back from the initial proposed offering of 4 million shares of common stock announced March 8. At the time of the initial filing to offer the shares, the company's stock (NASDAQ:REGN) was trading at $47 a share making the offering worth a potential $188 million. (See BioWorld Today, March 8, 2000, p.1.)

However, with the entire biotech sector slumping in March, the Tarrytown, N.Y.-based Regeneron priced the offering at $29.75 per share on Wednesday, generating gross proceeds for the company of $77.35 million - the company expects to net $72.952 million after underwriting discounts and estimated expenses. Regeneron's stock closed Thursday at $28.6875 a share, down $1.

The offering is being underwritten by Merrill Lynch & Co., Lehman Brothers, J.P. Morgan & Co. and Robertson Stephens. Thousand Oaks, Calif.-based Amgen Inc. is offering up to an additional 390,000 shares of Regeneron stock to cover the underwriters' overallotments, if any. Regeneron won't receive any proceeds from the sale of Amgen-owned stocks. The company expects the offering to be finalized by April 4.

Regeneron is under an SEC-imposed quiet period and was unavailable for comment. With completion of the offering, Regeneron will have approximately 35 million shares outstanding. The company closed 1999 with $93.5 million cash on hand.

The company plans to use the proceeds of the sale of stock to advance clinical and preclinical programs as well as for development of its recently broadened pipeline. The company's focus has expanded from degenerative neurological diseases to include candidates for obesity, rheumatoid arthritis, cancer, allergies, asthma, ischemia and other disease. The broadened pipeline comes as the result of the company's technology platforms called Targeted Genomics, Functionomics and Designer Protein Therapeutics.

Regeneron's most advanced product is Axokine, which has just entered a Phase II dosing study for the treatment of obesity. Axokine is a second-generation ciliary neurotrophic factor. It was originally evaluated as a potential treatment for patients with amyotrophic lateral sclerosis (ALS). However, in the clinical program, the researchers discovered that the drug reduced appetite and caused weight loss - undesirable side effects in that population. The company tested the product in animal models of obesity and confirmed the drug's ability to induce weight loss.

The company recently entered into a collaboration with Emisphere Technologies Inc. to develop an oral version of Axokine. (See BioWorld Today, March 10, 2000, p.1.)

Regeneron, in collaboration with Amgen, is developing brain-derived neurotrophic factor (BDNF) as a treatment for ALS. The companies are developing both subcutaneous and intrathecal delivery methods for BDNF in ALS patients. Both methods of administration are being evaluated in clinical studies.

The company also has Neurotrophin-3 in clinical development to treat constipating conditions associated with spinal cord injury and other medical conditions.

In preclinical development, Regeneron is looking at antagonists to vascular endothelial growth factor to combat cancer by choking off the supply of new blood vessels to tumors. Its Cytokine Trap program is a number of antagonists to cytokines thought to play a major role in inflammation such as interleukin-1 and interleukin-4. Finally, the company is developing angiopoietins, growth factors specific for blood vessels and early hematopoietic stem cells as a means of both blocking and encouraging blood vessel growth. The angiopoietins could be useful in treating cancer, heart disease, and diabetic retinopathy, among other indications.