By Charles Craig
Human Genome Sciences Inc., which is moving from genetic information provider to protein drug developer, and SangStat Medical Corp., which has two products under FDA review, completed public offerings Friday for a combined $189 million.
Human Genome Sciences, of Rockville, Md., sold 3 million shares at $37 per share for gross proceeds of $111 million. The company ended 1996 with $116 million in cash and reported a net loss of $7.8 million for the year. Following the offering, Human Genome Sciences has 21.8 million shares outstanding.
Underwriters were Lehman Brothers Inc., Bear, Stearns & Co. Inc., Merrill Lynch & Co., Smith Barney Inc., and UBS Securities, all of New York. They have options to buy another 450,000 shares to cover overallotments.
SangStat, of Menlo Park, Calif., sold 2.6 million shares, 600,000 more than initially proposed, at $30 per share for gross proceeds of $78 million. The company ended 1996 with $41 million in cash and reported a net loss of $12.8 million for the year. It has about 15 million shares outstanding.
Underwriters were Hambrecht & Quist LLC, Montgomery Securities, and Robertson, Stephens & Co., all of San Francisco. They have options to purchase another 390,000 to cover overallotments.
Human Genome Sciences registered for the 3-million share offering in late February and the day before announcing the proposed equity financing its stock (NASDAQ:HGSI) was trading at $42.50. Its shares ended Friday at $37.50, up $0.125.
The company was among the first biotechnology firms established to sequence and identify human genes for drug discovery purposes. In 1993, it entered a $125 million collaboration with London-based SmithKline Beecham plc for use of the genetic data to develop small molecule compounds.
Human Genome Sciences is using its protein discoveries for its own drug development efforts. The company has six therapeutic proteins in preclinical development and expects to begin evaluating some candidates in human trials later this year. The protein drugs will target cancer, hematopoiesis, wound healing, viruses and inflammatory disorders.
In addition to supporting clinical drug development activities, Human Genome Sciences said funds from the offering will be used to file and protect patents for the human genetic material it has discovered.
The company said it has filed U.S. patent applications covering 250 full-length genes and their proteins and five have issued. In Europe nearly 100 patents have been published.
Human Genome Sciences also has applications for patents on 1 million partial gene sequences, which, the company said, represent 100,000 human genes.
SangStat's stock (NASDAQ:SANG) was trading at $28.375 the day before it registered to sell 2 million shares in late January. Demand pushed the offering up to 2.6 million shares.
SangStat closed Friday at $30.00, down$0.50.
The company is developing drugs for organ transplants. Two products under review at the FDA target prevention of a transplant recipient's rejection of a donor organ. One drug is a version of the immunosuppressive agent cyclosporine and the other is Thymoglobulin, an anti-T cell polyclonal antibody licensed from Pasteur Merieux Serums & Vaccins, of Lyon, France. *