Citing unfavorable market conditions, Sibia Neurosciences Inc. withdrew a proposed public offering of 2.25 million shares, which would have grossed $17.7 million based on the assumed price of $7.88 per share.
"We feel the current share price does not adequately reflect the value of our technology and drug discovery successes," said William Comer, president and CEO, in a prepared statement.
Sibia's shares (NASDAQ:SIBI) have been trading mostly in the $6 to $7 range since the company filed the offering in early November. The La Jolla, Calif.-based company has about 9 million shares outstanding. Its stock closed Thursday at $6.25, unchanged.
The registration statement for the offering also included 250,000 shares for sale by The Salk Institute. That portion of the offering also was withdrawn.
The setback appears unlikely to cause a cash crunch at Sibia. As of Sept. 30, the company had $35.7 million in cash, following a net loss of $5.1 million over the first nine months of 1997. Revenues for the period totaled $9.1 million, up from $6.5 million.
"We're in sound cash position now," said Thomas Reed, vice president for finance and administration and the firm's chief financial officer. "I don't think we're going to be scaling anything back."
The offering simply would have provided an extra "insurance policy," he said.
Sibia's lead drug is SIB-1508Y for Parkinson's disease, now in a Phase II trial. The drug is a nicotinic acetylcholine receptor (NAChR) that works by regulating the release of dopamine and acetylcholine. Deficiencies of dopamine are linked to progression of Parkinson's disease, and deficiencies of acetylcholine contribute to cognitive dysfunction. — Debbie Strickland