OXIGENE, RIDING STOCK SURGE, SEEKS $25M IN PUBLICOFFERING

By Charles Craig

Oxigene Inc., developing drugs to enhance effectiveness of radiationand chemotherapy cancer treatments, has experienced a stock surgeof more than 300 percent in the last year and is attempting to cash inon that increase with a public offering of 1 million shares.

The company, which has headquarters in New York and Lund,Sweden, anticipates a price of $25.75 per share for the offering,generating $25.75 million. Underwriters are D. Carnegie AB, ofStockholm, and Nordberg Capital Inc., of New York.

In June 1995, Oxigene changed management and raised $10 millionin a private placement of 1.6 million shares at $6 per share. (SeeBioWorld Today, June 27, 1995, p. 2.)

Oxigene officials said clinical development progress of its leadproducts, Sensamide and Neu-Sensamide, and new leadership ofpresident and CEO Bjorn Nordenvall have helped boost confidencein Oxigene among investors, pushing its stock to $25.50 at the closeof trading Wednesday. The price represents a 325 percent increaseover the June 1995 $6 per share private placement, which also wasmanaged by Carnegie.

Oxigene officials said they expect to price the public offering by mid-November. The company's stock (NASDAQ:OXGN) closedThursday at $24.25, down $1.25.

Mixed Market Conditions Prevailed In October

While Oxigene is riding a stock surge, San Diego-based AlanexCorp., courting the capital markets for the first time with itscombinatorial chemistry technology, postponed its initial publicoffering this week because of poor market conditions.

In early October, Alanex registered to sell 2.5 million shares at aprojected price range of $10 to $12. Based on an IPO price of $11,the company anticipated raising $27.5 million. Underwriters arePaineWebber Inc. and Needham & Co. Inc., both of New York, andSutro & Co. Inc., of Los Angeles. (See BioWorld Today, Oct. 2,1996, p. 1.)

Alanex has drug discovery alliances with threepharmaceutical firms: Roche Bioscience, of Palo Alto, Calif., a unitof Roche Holding Ltd., of Basel, Switzerland; Novo Nordsik A/S, ofBagsvaerd, Denmark; and Astra AB, of Sodertalje, Sweden. Rocheand Astra are researching treatments for pain and Novo is targetingdiabetes.

Alanex's frustration is an indication of the mixed market conditionsfor IPOs in October.

Earlier in the month two companies, Arqule Inc., of Medford, Mass.,and Transkaryotic Therapies Inc., of Cambridge, Mass., completedsuccessful IPOs raising a combined $67 million. (See BioWorldToday, Oct. 18, 1996, p. 1.)

Arqule, another combinatorial chemistry company, priced its IPO at$12 per share, within the projected range of $11 to $13, andincreased the shares offered to 2.5 million.

Transkaryotic Therapies Inc., of Cambridge, Mass., attempting tochallenge the industry's leading firms for a share of their lucrativetherapeutic protein markets, sold 2.5 million shares at $15, the topend of the anticipated range in its IPO.

Arqule (NASDAQ:ARQL) closed Thursday at $12.50, up $0.50.Transkaryotic (NASDAQ:TKTX) ended the day at $14.625,unchanged.

Late last week, however, Cubist Pharmaceuticals Inc., of Cambridge,Mass., had to settle for $6 per share, far below the range of $11 to$13, to complete its IPO of 2.5 million shares. Cubist is developingnew antibiotics by targeting enzymes linked to protein synthesis ininfectious bacteria and fungi.

Cubist (NASDAQ:CBST) closed Thursday at $6.875, off $0.125.

Oxigene's drug development is based on blocking a DNA repairenzyme, called adenosine diphosphate ribosyl transferase (ADPRT),that counters the cytotoxic effects of radiation and chemotherapy oncancer cells.

The lead product, Sensamide, is a high dose form of metoclopramidethat inhibits the ADPRT enzyme to make tumor cells more sensitiveto radiation and chemotherapy treatments. Sensamide is in PhaseII/III trials in combination with radiation for inoperable non-smallcell lung cancer. Results are expected in the third quarter of 1997.

A Phase III trial of Neu-Sensamide, a second generation compounddesigned to produce fewer adverse side effects, is expected to beginlater this year in lung cancer patients.

Oxigene also is working on compounds that stimulate ADPRT toboost DNA repair for treatment of other diseases.

In Oxigene's offering, most of the 1 million shares are expected to besold outside the U.S. in Sweden and other countries. The companyanticipated selling 200,000 shares in the U.S. and 800,000 overseas.

Oxigene's Swedish connection is to co-founder and chief scientificofficer, Ronald Pero, who is on the faculty of the University of Lund.The University Hospital in Lund also is collaborating with Oxigeneon clinical development of its drugs.

As of June 30, 1996, Oxigene had $10.7 million in cash and reporteda net loss of $3.4 million for the first six months of this year. n

(c) 1997 American Health Consultants. All rights reserved.

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