By Jim Shrine

Special To BioWorld Today

SuperGen Inc. continued its nontraditional approach to financing by securing a $36 million stock equity line of credit over two years with an unidentified major banking firm.

The San Ramon, Calif., company intends to draw about $3 million by the end of this year, giving it about a year's worth of cash, chairman and CEO Joseph Rubinfeld said. The stock price will be determined by the quarterly average, as it will be when future financings are accessed.

"We set threshold prices," Rubinfeld told BioWorld Today. "If I don't like the prices I don't take the money. It is the average price over the entire [quarterly] period, so there's no stock manipulation.

"This is a great financing in this atmosphere," Rubinfeld said. "There's no resets, no warrants, no conversions, no preferred . . . it's all common stock." That allows SuperGen to control the amount of dilution, he said.

SuperGen, which has a cancer drug on the market and another in Phase III trials, has raised nearly $60 million since its founding, including a $21 million initial public offering in March 1996. Oracle Corp. chairman Lawrence Ellison has invested about $23 million and is SuperGen's largest shareholder, with a stake of about 15 percent. Rubinfeld, who co-founded Thousand Oaks, Calif.-based Amgen Inc. in 1980, owns about 12 percent of the company.

SuperGen's stock (NASDAQ:SUPG) has been trading around $7 recently, but had dropped from about $18 earlier this year. Rubinfeld said he didn't want to dilute the stock by selling millions of shares at the current prices. "I'm hoping to get an average of $12 to $15 per share over two years," he said.

As of Sept. 30, SuperGen had about $13 million in cash and 20.4 million shares outstanding, with a net loss of $11.2 million for the first nine months of the year. Revenues in that period were about $2.1 million.

Two years ago, SuperGen licensed the small-molecule purine analogue drug Nipent, for which it has rights in North and South America. It is approved for hairy-cell leukemia. Rubinfeld said he expects sales to reach $3.6 million this year and to triple in ensuing years, now that the FDA has approved its production process.

SuperGen intends to file for approval of Nipent for a cutaneous T-cell lymphoma indication by the end of the year, Rubinfeld said.

A second major focus is development of RFS 2000, a topoisomerase I inhibitor that is extracted from the bark and leaves of the camptotheca acuminata tree in China. In May, SuperGen reported that a Phase II study of RFS 2000 in 53 pancreatic cancer patients showed 32 percent responded, 32 percent were stable and 26 did not respond. Eighteen of the patients are surviving at more than 20 months, Rubinfeld said.

A Phase III randomized study to include a few hundred patients is under way in pancreatic and ovarian cancers, Rubinfeld said, with a plan to expand the indications later. The company hopes to be prepared to seek approval of RFS 2000 in a year, he said.

SuperGen also is developing generic cancer drugs and "supergenerics," or drugs with added-value properties that allow the manufacture of ready-to-inject, stable solutions.

"We hope to become profitable in two years," Rubinfeld said, adding that the new financing should be enough to get there.

"I want to make this into a major stock," Rubinfeld said. "I don't need the $36 million right away. We believe the stock will go up, not down. We hope the people who bet against us . . . this should put that to rest. As time goes on it will begin to filter out that SuperGen is here to stay. Once that message gets out, the stock will begin to act appropriately."

A disadvantage for the stock, Rubinfeld said, is that SuperGen never accepted venture money and does not use large investment firms, so very few analysts follow the company. The initial offering was underwritten by Paulson Investment Co. Inc., of Portland, Ore. The new investor was not disclosed, but Rubinfeld said it is one of the world's three largest banks. *