By Randall Osborne

With a Phase III trial under way for its drug to block precancerous colon polyps, Cell Pathways Inc. has registered for an initial public offering (IPO) of 2.5 million shares with a proposed price range of between $11 and $13 per share.

Cell Pathways, of Horsham, Pa., would raise $32.5 million, based on the higher price. After the offering, the company would have 10.160 million shares outstanding.

The company has granted the underwriters — Salomon Brothers Inc., of New York, BancAmerica Robertson Stephens, of San Francisco, and Cowen & Company, of Boston — an overallotment option of 375,000 shares.

Cell Pathways' lead drug is FGN-1, a small molecule being studied in a multinational Phase III trial for patients who have been diagnosed with adenomatous polyposis coli, an inherited condition that causes large numbers of precancerous colonic polyps. These patients face a high risk of developing colon cancer, and most often are treated with surgery.

Orally administered FGN-1, however, is said to increase the rate of apoptosis, which is programmed cell death. Thus, premalignant lesions in the colon are restored to normal without invasive therapy.

Apparently, FGN-1 finds an intracellular target that prevents abnormally growing cells from destroying themselves through apoptosis.

Conventional chemotherapy and radiation work more crudely, by causing DNA damage and halting the cells' cycle of growth. Such treatments end up killing tumor cells and normal cells, which causes the toxic side effects well known to patients and their families.

Treatment with FGN-1 could be particularly of interest to patients who have premalignant lesions but otherwise are healthy — such as those with the inherited polyps condition, which afflicts 25,000 to 50,000 people in the U.S., with a similar incidence of disease in Europe and Japan.

As of June 30, Cell Pathways had $13.290 million in cash, with a net loss of $3.443 million for the first six months of 1997. *

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