By Karen Pihl-Carey
Diacrin Inc. expects to raise net proceeds of $49.2 million in a public offering of 3 million shares as its lead product, NeuroCell-PD, moves into a Phase III trial.
The Charlestown, Mass.-based company registered to sell the shares, along with an additional 450,000 shares to cover overallotments, at an assumed price of $17.63 per share, the closing stock price on Tuesday. The company announced the public offering after the market closed on Wednesday. Diacrin's stock (NASDAQ:DCRN) closed Thursday at $15.25, down $1.50.
PaineWebber Inc., of New York, and Nomura International plc, of London, are managing underwriters for the offering. If they exercise the overallotment option in full, Diacrin estimates it will raise an additional $7.5 million in net proceeds for a total of $56.7 million.
In an SEC filing, the company said it intends to use proceeds for general corporate purposes, including product research and development. It also may use part of the proceeds to acquire or invest in complementary companies, products or technologies, although it currently has no agreements to do so.
Following the offering, Diacrin will have about 17.4 million shares outstanding.
For 1999, the company posted revenues of $4.3 million, with a net loss of $4.8 million, or 33 cents per share. The company had cash, cash equivalents and investments of $21.4 million.
Diacrin is a company that focuses on treating human diseases characterized by cell dysfunction or cell death by developing cell transplantation technology. Due to the inadequate supply of human donor cells, Diacrin uses porcine (pig) cells, which are functionally similar to human cells.
The company's lead product, NeuroCell-PD, completed in 1999 a three-year Phase I trial in 12 patients with Parkinson's disease. The company also initiated an 18-patient, pivotal, randomized, double-blind, placebo-controlled Phase II/III trial in 1998. This trial is expected to be unblinded later this year, and the company plans to begin enrolling 36 patients for a single-blind, randomized Phase III trial in mid-2000.
NeuroCell-PD has been designated a fast-track product, as well as an orphan drug for advanced Parkinson's disease.
Both NeuroCell-PD and another candidate, NeuroCell-HD for Huntington's disease, which is in a Phase I trial, are being developed through a joint venture with Genzyme Corp., of Cambridge, Mass. Genzyme so far has contributed $23.7 million to the development of the product candidates. The company bought out a subsidiary's interest in the NeuroCell joint venture last year. (See BioWorld Today, April 2, 1999, p. 1.)
Aside from the NeuroCell products, Diacrin also is testing porcine neural cells in stroke, focal epilepsy and chronic intractable pain; porcine spinal cord cells in spinal cord injury; human liver cells in cirrhosis; porcine liver cells in acute liver failure; human muscle cells in cardiac disease; and porcine RPE (retinal pigment epithelial) cells in macular degeneration. All of these programs are either in the preclinical or Phase I trial stages.
Diacrin also is developing technology designed to modulate the human immune system so it doesn't reject transplanted cells. The company's approach would eliminate the need for immunosuppressive drugs.