By Karen Pihl-Carey

Protein Design Labs Inc. plans to raise $100 million in a private offering of convertible subordinated notes that will help the company fund clinical trials and expand manufacturing capabilities.

The notes, due 2007, would be convertible into PDL common stock, at the option of the holder. A conversion price has not yet been set.

PDL, of Fremont, Calif., also has the option to issue an additional $25 million of notes to cover overallotments. The offering is expected to close this month.

Proceeds, the company said, would go to fund clinical trials, to expand manufacturing capabilities and for working capital and other general corporate purposes.

Robert Kirkman, vice president of business development and corporate communications for PDL, said he could not comment on the offering.

PDL also released preliminary financial results for the fourth quarter of 1999 and the full year. The company estimated revenues of about $8.1 million and a net loss of $5.9 million, or 32 cents per share, for the quarter. For the year, it estimated revenues of $35.8 million, with a net loss of about $10.3 million, or 55 cents per share. The results compare with 1998 fourth-quarter revenues of $6.4 million and a net loss of $5.3 million, or 28 cents per share. For all of 1998, the company posted revenues of $30.8 million and a net loss of $9.5 million, or 51 cents per share.

In the clinic, PDL has several products, including its already-approved Zenapax, which is being tested to treat psoriasis and uveitis, both autoimmune diseases. Zenapax is approved for the prevention of acute graft rejection in kidney transplant recipients. The company expects to begin additional Phase II trials in psoriasis, as well as a Phase I trial in multiple sclerosis.

PDL's SMART M195 antibody moved into a Phase III trial in November in patients with refractory or first-relapsed acute myelogenous leukemia. (See BioWorld Today, Nov. 17, 1999, p. 1.)

The company also has SMART Anti-CD3 antibody in Phase I/II trials for psoriasis and graft-vs.-host disease; SMART Anti-L-Selectin antibody in a Phase IIa trial in trauma patients; and SMART 1D10 antibody in a Phase I trial to treat non-Hodgkin's lymphoma.

PDL also reported that the FDA suspended a recently initiated Phase II trial evaluating SMART Anti-CD3 in preventing acute rejection in patients who have undergone kidney transplantation. The decision followed the company's request to increase the dosing regimen due to lower than expected T-cell depletion observed in the first six patients doses, said analysts at New York-based SG Cowen Securities Corp. in a report.

The Cowen analysts said the FDA action centered on the pharmacokinetic and pharmacodynamic profile, rather than on safety. The analysts called it a minor delay and said they did not believe it would have a material impact on the overall development and utility of the drug in this indication.

PDL's stock (NASDAQ:PDLI) closed Tuesday at $80.125, down $1.50.