By Debbie Strickland
Texas Biotechnology Corp. more than tripled its available cash through a $5-a-share public offering that grossed $25 million, yielding net proceeds to the company of $23.2 million.
Another $3.5 million is possible if underwriters Lehman Brothers Inc. and PaineWebber, both of New York, exercise in full an overallotment option for 750,000 shares.
The offering boosts the Houston company's shares outstanding to 31 million.
Texas Biotechnology specializes in developing small molecule drugs for cardiovascular disease. Its approach to drug design is centered on converting bioactive peptides, oligosaccharides or proteins into small molecule drugs.
As of June 30, the company had $9.3 million in cash, following a net loss of $10 million in the first half of 1997.
About $12.5 million of the offering's net proceeds will support clinical development, including Texas Biotechnology's lead product candidate, Novastan (argotroban), and approximately $9.8 million will fund preclinical projects. The company plans to use the remainder for capital expenses.
Texas Biotechnology last month filed a new drug application with the FDA for Novastan for use as an anticoagulant in patients who develop immune reactions to treatment with heparin. The agency granted the drug priority review status, and a decision is expected by mid-1998.
Every year, 275,000 heart attack patients treated with heparin develop a potentially life-threatening blood clot, according to the company.
Texas Biotechnology also is testing Novastan at the Phase II level as a treatment for heart attack. The product is marketed in Japan for ischemic stroke, peripheral arterial occlusion and hemodialysis in patients with antithrombin III deficiency.
Texas Biotechnology licensed U.S. and Canadian rights to Novastan from Mitsubishi Chemical Corp. and has entered a collaboration with SmithKline Beecham P.L.C., of London, to develop and commercialize the drug. The SmithKline deal could be worth as much as $31.5 million to the company in up-front cash payments and milestones.
In addition to Novastan, the company has ongoing Phase II clinical trials of TBC 11251 — a compound for the treatment of vasospasm and hypertension — in patients with congestive heart failure. Nearing Phase II trials in allergic asthma is TBC 1269, the company's lead drug for vascular inflammation.
Texas Biotechnology's stock (AMEX:TXB) closed Friday at $5.25, down $0.188. *