By Mary Welch

Rigel Pharmaceuticals Inc. intends to raise $100 million through an initial public offering (IPO), with the proceeds going toward increasing the company's capitalization and financial flexibility, as well as for research and development activities and possible acquisitions.

Rigel, a post-genomics combinatorial biology company, did not indicate how many shares will be offered or at what price.

The company posted contract revenues for the first nine months of 1999 of $5.9 million and a net loss of $7.92 million. The South San Francisco-based company had $9.5 million in cash as of Sept. 30. The company used 23.4 million shares to compute its pro forma net loss per share, which was $2.87 for that time period.

On Feb. 3, the company received about $15 million, net of issuance costs, in a private placement in which about 2.5 million shares of preferred stock were sold at $6 per share, according to the prospectus filed with the SEC.

Last week, Sequenom Inc. grossed $157 million in its IPO, second largest in the industry only to Genentech Inc.'s $2.1 billion offering last year. And also last week, four companies - Tanox Inc., InterMune Pharmaceuticals Inc., Drug Abuse Sciences Inc. and Centaur Pharmaceuticals Inc. - registered for IPOs. (See BioWorld Today, Feb. 4, 2000, p. 1.)

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.

In June, the company signed a deal worth up to $100 million with Novartis Pharma AG, of Basel, Switzerland, to collaborate on five research projects to identify targets using Rigel's functional genomics technology. The first program is to identify targets that regulate T cells, which play a key role in the body's immune system, especially in the body's acceptance of newly transplanted organs. The second involves B-cell activation. (See BioWorld Today, June 9, 1999, p. 1.)

Rigel also has a $20 million deal with Janssen Pharmaceutica NV, of Beerse, Belgium, to use its functional genomics technology to help Janssen identify new drug targets that control the progression of colon and breast cancer. (See BioWorld Today, Jan. 15, 1999, p. 1.)

The offering is being made through an underwriter group led by Warburg Dillon Read LLC, of New York, with Robertson Stephens and Prudential Vector Healthcare Group, both of New York, serving as co-managers. The underwriters will be granted a 30-day overallotment option to purchase an undisclosed number of additional shares.

The proposed Nasdaq ticker symbol is RIGL.