By Frances Bishopp

Shaman Pharmaceuticals Inc. has closed a public offering of 2 million shares of common stock at $4.50 a share, raising gross proceeds of $9 million, about $3 million less than originally anticipated.

Barbara Goodrich, chief financial officer, at Shaman, told BioWorld Today, the company had set an original price of $6, the price of the stock when the offering was filed in December.

"This offering played heavily in the temporary depression of the price of the stock," Goodrich said. "We're not shocked."

Goodrich said the money will help the company stay on track for its "very ambitious clinical trials planned for this year."

Shaman, of South San Francisco, discovers and develops new classes of traditional pharmaceuticals derived from plants. Its focus is the isolation of active compounds from tropical plants that have a history of native medicinal use.

Shaman uses an ethnobotanical approach to drug discovery, screening extracts from tropical plants traditionally used for medicinal purposes.

Shaman raised approximately $3.3 million through a private placement in July, Goodrich said, selling 400,000 shares of convertible stock at $18.15. The per-share price represented a 33 percent premium to Shaman's market price of July 25, 1996, when the deal was negotiated. Each of the 400,000 shares is convertible to a common share before July 25, 1999, at which time they automatically convert.

The company has the option, from time to time, to sell an aggregate of 1.2 million shares at a premium to the then prevailing average price of common stock. As Shaman exercises these rights, the purchaser will have the option to increase the number of shares purchased by as much as 527,500. The price per share will be calculated at a premium over an average of the company's market prices at the time of the sale.

Assuming full exercise of these options by the company and the purchaser, at prices at least similar to those currently prevailing, net cash to the company could exceed $14 million. The third part of the deal involves warrants for the purchase of 550,000 shares at $10.18 a share for $5.6 million. The investors can exercise the warrants during the next six years.

The company currently has three compounds in clinical development: Virend, a topical antiviral for the treatment of herpes; Provir, an oral product for the treatment of secretory diarrhea; and nikkomycin Z, an oral antifungal for the treatment of endemic mycoses.

Provir currently is in Phase II double-blind, placebo-controlled dose-optimization trials. Virend is in combination trial with current standard of herpes for genital herpes and nikkomycin is in Phase I clinical trial in the U.K.

Shaman entered into a collaboration with Ono Pharmaceutical Co. Ltd., of Osaka, Japan, in December 1996, which paid Shaman $1 million for enhanced rights to develop and commercialize Shaman's 10 diabetes compounds.

Shaman is also has a collaboration with Lipha S.A., of Lyon, France, to develop anti-diabetic drugs. The agreement is worldwide except for Japan, South Korea and Taiwan. Lipha S.A., of Lyon, France, will provide capital of $19.5 million over a five-year period.

Both research companies have committed a combined $25 million.

Shaman, as of Sept. 30, 1996, had cash on hand of $20.4 million. Its stock (NASDAQ:SHMN) gained $0.125 Wednesday to end the day at $5.125. *