By Mary Welch

Praecis Pharmaceuticals Inc. is finding the second time a charm as it re-filed for an initial public offering (IPO) to raise $156.4 million.

The Cambridge, Mass-based company initially tried to raise about $64.4 million by selling 4 million shares at $16 each in August 1998. However, in April the company withdrew its IPO. The price per share and number of shares being offered were not disclosed in the new filing.

"We did the first IPO the day the Asian market crashed," said Malcolm Gefter, Praecis' CEO. "The market just went down. So we withdrew it, not because of anything related to the company, but due to market conditions."

This time, he said, the conditions are fine.

"We're doing this IPO because, given the age of the company and the need for capital resources, it is the right thing to do."

For this offering, Salomon Smith Barney Inc., CIBC World Markets Corp. and CS First Boston Corp. will serve as the underwriters. The underwriters have been given an overallotment option on 525,000 additional shares. After the offering, there will be 19.2 million shares outstanding.

Praecis intends to use the proceeds for the production of abarelix, which is in Phase III trials for treating hormonally responsive prostate cancer, as well as to fund a new facility and other clinical and preclinical testing.

Abarelix is a gonadotropin-releasing hormone (GnRH) antagonist, designed to quickly reduce testosterone levels. Once called PPI-149, abarelix also can be referred to as an inhibitor of luteinizing hormone releasing hormone.

In March, Praecis entered into a $100 million collaboration with Amgen Inc., of Thousand Oaks, Calif., to develop and commercialize abarelix. Amgen, which is covering all of Praecis' expenses for abarelix, gained rights to all human indications in North America, Australia, Asia and certain other markets. Praecis retained the responsibility for conducting clinical studies as well as for manufacturing. Last year Amgen paid Praecis $56.8 million under that agreement. (See BioWorld Today, March 11, 1999, p. 1.)

Separately, Praecis is collaborating on abarelix with Synthelabo, of Paris, which has rights to Europe, Latin America, the Middle East and certain African countries. That deal was initially valued at $78 million. (See BioWorld Today, June 6, 1999, p. 1.)

So far, abarelix has been tested in about 1,000 patients with prostate cancer at more than 100 centers. The company expects a new drug application filing by the end of the year. According to the prospectus, Praecis believes abarelix could become a $2 billion drug worldwide for prostate cancer.

In addition, Praecis is developing another formulation of abarelix for the treatment of diseases in women that can be addressed by lowering estrogen levels. The drug is now in Phase II/III trials for women with endometriosis.

The company is developing abarelix with its proprietary technology, Ligand Evolution to Active Pharmaceuticals (LEAP), that enables it to rapidly analyze large numbers of molecules and identify those that have the desired properties to be further developed into drugs.

The LEAP technology was used to develop Apan, a drug for the treatment of Alzheimer's disease. The company expects to file an investigational new drug application and begin clinical trials within the next 12 months.

Praecis reported year-end revenues of $61.5 million and a net income of $9.2 million. As of Dec. 31, the company had $94.5 million in cash.

Separately, Praecis and Human Genome Sciences Inc., of Rockville, Md., said Tuesday they will collaborate on small-molecule drug discovery. Under the agreement, Praecis will screen two HGS targets to identify novel small-molecule drugs to combat metabolic disorders and infectious diseases. Financial terms were not disclosed.

The company was incorporated in 1993 as Pharmaceutical Peptides Inc., but changed its name in 1997.

Praecis' proposed Nasdaq ticker symbol is PRCS.