By Charles Craig

Two months after generating $9 million in a public offering, Shaman Pharmaceuticals Inc. is back for a second bite at the capital markets, expecting to raise at least as much in another equity sale of 2 million shares.

Shaman, of South San Francisco, 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.

The company 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.

Shaman ended 1996 with $16.5 million in cash and reported a net loss of $18.79 million for last year. The company received net proceeds of $8.2 million in an offering priced at $4.50 per share in January. Hambrecht & Quist LLC, of New York, was underwriter.

Shaman registered Thursday with the Securities and Exchange Commission to sell another 2 million shares directly to institutional investors. Based on the $4.562 closing price Wednesday of the company's stock (NASDAQ:SHMN), it would raise $9.1 million. Following the offering Shaman will have 17.9 million shares outstanding.

Shaman ended Thursday at $4.187, down $0.375.

Provir is derived from the latex of the croton tree in South America. A topical version, Virend, is in clinical trials for genital herpes. Traditional uses of the croton tree include treatments for respiratory diseases, gastrointestinal disorders and wound healing.

In addition to the anticipated Phase III trial of Provir, a Phase II study of the drug for AIDS diarrhea is expected to begin by the end of March.

Virend has completed Phase II trials. Another clinical study is under way using Virend in combination with oral acyclovir.

Shaman's other drug in clinical development is nikkomycin Z, which was licensed in 1995 from Bayer AG, of Leverkusen, Germany. The drug is targeted for endemic mycoses, which are systemic fungal infections, such as coccidioidmycosis, histoplasmosis and blastomycosis.

Nikkomycin Z is in Phase I safety trials in the U.K. It is designed to inhibit an enzyme found in cell walls of fungi, causing the cells to burst. The enzyme, chitin synthetase, is not found in mammalian cells.

Shaman also has identified 13 plant-derived compounds for treatment of Type II diabetes and has collaborations with Ono Pharmaceuticals Inc., of Osaka, Japan, and Merck KGaA, of Darmstadt, Germany, for development of those drugs. The oral compounds are designed as blood glucose lowering agents. *