By Debbie Strickland
SUGEN Inc. scaled down its public offering by 500,000 shares but still grossed $32 million through the sale of 2 million shares at $16 apiece. The price was $1.25 less than the prospectus' assumed price.
The overallotment option was likewise shaved to 300,000 shares, from the proposed 375,000. The managing underwriters are Hambrecht & Quist LLC, of San Francisco and Lehman Brothers and UBS Securities LLC, both of New York.
Although the offering fell short of the anticipated $43.1 million goal, it priced just two weeks after the filing of the registration statement with the Securities and Exchange Commission.
The Redwood City, Calif., company, over the course of two months, has roughly doubled its available cash through both the offering and a private placement of $17.5 million completed in September.
SUGEN's cash level at mid-year was $43 million, with a net loss of $15.6 million for the first six months of 1997. The company has 15.1 million shares outstanding.
Proceeds from the offering will be used for research and development — the company has 15 programs under way, including three clinical-stage drugs — and for working capital and general corporate purposes. SUGEN may also use a portion of the funds to acquire or invest in other businesses, products or technologies.
The company is developing new classes of small molecule drugs that interact with members of the tyrosine kinase, serine-threonine kinase and tyrosine phosphatase families of signal transduction molecules and their signaling pathways. These pathways are involved in a number of diseases, including cancer and diabetes, as well as immune and neurological disorders.
Clinical Trials Target Cancer, Psoriasis
SUGEN has three independent clinical-stage drugs, including the lead product, SU101, a platelet-derived growth factor receptor inhibitor, in Phase II for the treatment of malignant gliomas and other cancers. SU5271, an epidermal growth factor receptor inhibitor, is in Phase I studies for psoriasis, and SUGEN recently initiated a Phase I trial for SU5416, an Flk-1 angiogenesis inhibitor, for the treatment of solid tumors.
The company is analyzing data from a Phase II trial of SU101 as a treatment for refractory malignant glioma and plans to begin a Phase III trial in this indication by the end of the year. The drug, in combination with a standard chemotherapeutic, is in Phase II trials in newly diagnosed brain cancer patients.
A Phase II trial of SU101 in a third indication — hormone refractory prostate cancer — is slated to start by year end. To date, more than 140 patients have been treated with the drug in seven trials, including patients with brain, ovarian, prostate and non-small-cell lung cancers.
In addition to its independent cancer programs, the company has corporate collaborations at the preclinical level with Zeneca Group plc, of London, ASTA Medica, of Frankfurt, Germany, and Allergan Inc., of Irvine, Calif.
Combined, these deals are potentially worth more than $112 million if products succeed.
SUGEN's shares (NASDAQ:SUGN) closed Friday at $14.75, down $1.375. *