By Mary Welch

Celgene Corp. plans to sell 2 million shares of its common stock, worth nearly $130 million at current prices, in order to help fund its clinical and commercialization plans for Thalomid as well as the advancement of its IMiD, SelCID and Attenade programs.

In addition, the Warren, N.J.-based company also will sell 416,000 shares on behalf of the John Hancock Mutual Life Insurance Co., of New York, and its affiliates. However, Celgene will not receive any of the proceeds from that sale. The insurance company is converting half of a convertible bond that was issued to it by Celgene a year ago. John Hancock also agreed not to sell any more stock for at least 90 days.

"We are in a quiet period and can't talk," said Robert Hugin, Celgene's senior vice president and chief financial officer.

J.P. Morgan & Co. and Prudential Vector Healthcare Group, both of New York, are the joint lead managers for the offering. U.S. Bancorp Piper Jaffray, of Minneapolis, is acting as co-manager. Celgene will grant an option on 362,400 additional shares of common stock to the underwriters to cover overallotments.

Celgene's stock (NASDAQ:CELG) closed Wednesday at $63, down 68.7 cents. As of Sept. 30, it had about 17 million shares outstanding.

There are currently more than 100 clinical trials under way with Celgene products, most of them with Thalomid (thalidomide). The company plans to start Phase III trials of Thalomid in multiple myeloma this quarter and in solid tumors in the second half of this year.

It is also conducting trials with Thalomid for advanced cancers, prostate cancer, glioblastoma multiforme and the bone marrow disorder myelodysplastic syndrome, among other indications.

Thalomid is currently approved for cutaneous manifestations of moderate to severe erythema nodosum leprosum, a debilitating condition associated with leprosy, and as maintenance therapy for prevention and suppression of cutaneous manifestation recurrences.

Celgene acquired the exclusive worldwide rights for thalidomide as well as rights to its patents and technology from EntreMed Inc., of Rockville, Md., in December 1998.

In addition to targeting some of the money for Thalomid's development, Celgene will also use it to accelerate the advancement of its IMiD and SelCID product development programs, and its chiral chemistry program, which includes Attenade.

IMiDs are novel structural analogues, called immunomodulatory drugs, that Celgene designed and synthesized based on the biological activity and structure of Thalomid. IMiDs are designed to capture the ability of Thalomid to inhibit chronic overproduction of tumor necrosis factor-alpha but in a more effective and safer manner. In addition, these compounds are being tested for their effectiveness as anti-angiogenic agents.

Selective Cytokine Inhibitory Drugs (SelCIDS) have been determined to have a highly specific inhibitory effect on phosphodiesterase type 4 enzyme, the inhibition of which results in decreased tumor necrosis factor-alpha (TNF-a) production. Celgene believes it can regulate TNF-a production at its source, which may result in more effective therapy. Celgene believes a range of chronic inflammatory and autoimmune diseases could be treated with SelCID-based technology, including rheumatoid arthritis, non-insulin-dependent diabetes, inflammatory bowel disease and systemic lupus erythematosus.

Attenade (d-methylphenidate) is the chirally pure version of dl-methylphenidate, better known as Ritalin. Celgene has completed two pivotal efficacy trials of Attenade, and found the drug met all parameters for controlling the symptoms of attention deficit disorder and attention deficit hyperactivity in school-age children. The company expects to file a new drug application in the first half of this year.