Genelabs Technologies Inc. has sold 2.6 million shares of commonstock to Veron International, a British Virgin Isles internationalinvestment firm owned by Nina Kung Wang.
The sale raised $10.4 million for Genelabs and increased Wang'scurrent investment in outstanding shares at Genelabs from 8 percentto 14 percent, making Wang Genelabs' largest investor.
The shares were priced at $4 a each, the average actual market priceover a 10-day trading period, said Debra Catz Bannister, vicepresident of corporate communications and investor relations atGenelabs. The sale, after deducted estimated offering expenses andcommissions, will bring net proceeds to the company ofapproximately $9.5 million.
The new cash infusion is designated for general corporate purposes,Bannister said.
Genelabs, founded in 1984, focuses on infectious diseases,immunological disorders and gene-regulating drug discovery. TheRedwood City, Calif. company's lead compound is GL701 forsystemic lupus erythematosus. The compound is currently in twoPhase III clinical trials, Bannister said.
One trial, a steroid-sparing study, is designed to show whether the useof GL701 can reduce the need for prednisone in patients with mild tomoderate lupus. Prednisone, a steroid, is used widely for thetreatment of lupus and is known to cause serious complications,Bannister said. This trial, a placebo-controlled, double-blind study,enrolled 192 women with lupus with a treatment time of seven tonine months. Two different doses were tested: 100 mg a day and 200mg a day. Bannister said this study should be completed by the end ofthe year.
Genelabs also is conducting a second Phase III study to determinewhether GL701 can improve clinical outcome or disease symptoms,or both, in lupus patients. The study began in March and currentlyhas enrolled half of the designated 300 patients.
Genelabs' leading research program is based on a proprietary DNAbinding technology entitled Merlin. This technology is designed tocreate gene-specific, small organic, DNA-binding molecules.
Genelabs raised $20 million through a private placement in 1995,which brought another $10.7 million in March of this year whenwarrants were called in, the result of 3.2 million shares being sold.
As of Sept. 30, the company, which went public in 1991, had cash,cash equivalents and short-term investments of $21.6 million,compared with $22.6 million at year end in 1995. The monthly burnrate, Bannister said, is running at approximately $1 million a month.
Operating expenses were $6.3 million for the third quarter of 1996, adecrease from $7 million for the comparable quarter of last year.Genelabs' operating loss for the third quarter of 1996 was $3.2million compared with $3.8 million for the comparable period forlast year.
Genelabs' stock (NASDAQ:GNLB) closed Tuesday unchanged at$4.312. n
-- Frances Bishopp
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