By Charles Craig

Shaman Pharmaceuticals Inc. raised nearly $8 million in net proceeds in a self-directed public offering that CEO Lisa Conte said boosts her company's cash resources to an amount sufficient to fund operations for more than two years.

Shaman, of South San Francisco, sold 1.6 million shares at $4.97 per share to institutional investors, primarily T. Rowe Price Associates, of Baltimore, and Weiss, Peck & Greer LLC, of New York.

When the company registered for the offering in March it proposed selling 2 million shares and its stock (NASDQ:SHMN) was trading at $4.187. Although the number of shares was reduced, the offering price jumped 19 percent.

Shaman closed Friday at $5.25, up $0.125. It has about 17.5 million shares outstanding.

The equity financing was the second this year. Shaman raised $9 million in January through the sale of 2 million shares at $4.50.

Conte said the main objective in conducting another offering so soon after the January stock sale "was to get the right biotech institutional investors on board. We wanted investors who were going to hold the stock for a long time."

Conte noted that while most placements with institutional investors build in a discount on the share price, Shaman priced its offering at market value.

The nearly $16 million raised in the two offerings this year, coupled with milestone payments expected from corporate partners, gives Shaman enough cash to support operations for more than two years, Conte added.

Shaman has three drugs in clinical development, including Provir, an oral compound for treatment of secretory diarrhea, which is expected to begin Phase III trials this year.

The company uses an ethnobotanical approach to drug discovery, deriving pharmaceuticals from active ingredients in tropical plants and trees traditionally used as medicinal herbs in South America, Africa and Southeast Asia. *