By Karen Pihl-Carey

Maxim Pharmaceuticals Inc. priced its public offering of common stock at $55 per share, raising millions more than initially expected.

The company also upped the number of shares offered from 2.5 million to 3.205 million, the latter of which includes 375,000 shares covering overallotments.

With the exercise of the overallotment option, the company will have gross proceeds of $176.275 million. The offering is expected to close Feb. 28.

"The stock price did increase during the offering, significantly, so we were able to raise more than we [expected] when we filed for the offering," said Larry Stambaugh, chairman, president and CEO of San Diego-based Maxim.

The company's stock (AMEX:MMP) was at $40 when the offering was announced. It closed Wednesday at $69.75, up 27 percent, or $14.75. The 3.205 million shares in the offering were priced at $55 each, the closing stock price on Tuesday.

Initially, the company expected to raise $100 million in the offering to help launch Maxamine and pay for product research and development activities for the MaxDerm and MaxVax technology platforms. (See BioWorld Today, Jan. 26, 2000, p. 1.)

Stambaugh said the company still intends to use the proceeds for Maxamine and the other products.

"It's for the ongoing clinical development and the commercialization of Maxamine, since we expect to file our first NDA [new drug application] this year," he told BioWorld Today. "We're also preparing for a market launch in 2001."

J.P. Morgan & Co., of New York, is the lead manager for the offering, with Prudential Vector Healthcare Group, of New York, and Aragon Securities AB, of Stockholm, Sweden, acting as co-managers.

Following the offering, the company will have about 19.7 million outstanding shares and about $198 million in cash, Stambaugh said.

Maxamine, a histamine type-2 receptor agonist, is now in three Phase III trials. The drug shuts off production of free radicals, thereby protecting T cells and natural killer cells. It is administered in combination with cytokines. More than 1,000 patients have been treated with Maxamine for advanced malignant melanoma, acute myelogenous leukemia, hepatitis C and renal cell carcinoma. The first NDA filing will be for advanced malignant melanoma.

Proceeds from the offering also will go to MaxVax and MaxDerm. MaxVax, a novel mucosal vaccine carrier platform, will be developed for sexually transmitted diseases, major respiratory diseases and gastrointestinal diseases. It is in preclinical development. MaxDerm allows for the topical delivery of the active ingredient in Maxamine. It has been in studies to treat patients with herpes, oral mucositis, canker sores, decubitus ulcer and shingles.