By Debbie Strickland
Synaptic Pharmaceutical Corp. has approximately doubled its available cash by completing a public offering of 2.5 million shares that priced at $12.625 each, for a gross of $31.6 million.
The pricing fell 19 percent short of the prospectus' assumed price of $15.625 per share, which was based on the stock's Oct. 14 closing price. At that price the company would have grossed $39.1 million and netted $36.2 million.
Instead, the Paramus, N.J., receptor cloning specialist will receive $29.7 million to help fund its target and drug discovery efforts. As of June 30, Synaptic had $31.1 million in cash and cash equivalents, following a net loss of $2.1 million in the first half of 1997.
The offering's underwriters — Bear, Stearns & Co. Inc., of New York, Hambrecht & Quist LLC, of New York, and Vector Securities International Inc., of Deerfield, Ill. — have an overallotment option of 375,000 shares.
Synaptic clones human receptors for use as targets in the design of drugs, specializing in a receptor superfamily known as G protein-coupled receptors. According to the company, of the 100 drugs with the highest 1996 worldwide sales, 25 act through G protein-coupled receptors. Over the course of its 10 years in business, Synaptic has assembled a collection of cloned genes that code for members of the superfamily.
The company has four collaborations with pharmaceutical companies:
* Eli Lilly and Co., of Indianapolis, for acute migraine headache, migraine phrophylaxis, smoking cessation, depression and obesity.
* Merck & Co. Inc., of Whitehouse Station, N.J., for benign prostatic hyperplasia.
* Novartis AG, of Basel, Switzerland, for obesity.
* Warner-Lambert Co., of Morris Plains, N.J., for obesity, diabetes, Alzheimer's disease, depression and pain.
The most recent pact was signed with Warner-Lambert in August. Worth up to $34 million, the deal is for development of drugs based on Synaptic's work with receptors for galanin, a neurotransmitter thought to be associated with overeating.
All three of the earlier collaborators have extended their agreements. Through June 30, 1997, Synaptic had received an aggregate of $42.6 million in license fees, research funding and milestone payments and $14.5 million in equity investments from those three collaborative partners.
The company's most advanced compound, a Lilly-partnered drug to treat migraine headaches, is in Phase II European trials. The unnamed compound is a selective agonist of the serotonin 1F receptor subtype.
Synaptic's collaborations have produced six other preclinical compounds.
The company's shares (NASDAQ:SNAP) closed Friday at $12.625, down $0.50.*