Sugen Inc., which withdrew a follow-on offering last spring of 3.5million shares, returned to the capital markets with a scaled downequity sale of 2 million shares to raise a projected $28 million fordevelopment of drugs aimed at countering dysfunctional cellsignaling pathways involved in cancer and other disorders.
The Redwood City, Calif., company registered for the offering thisweek. Based on an estimated share price of $13.88, the stock salewould generate $27.7 million. Underwriters Lehman Brothers, UBSSecurities and Hambrecht & Quist LLC, all of New York, haveoptions to purchase another 300,000 shares to cover overallotments.
Sugen's stock (NASDAQ:SUGN) closed Thursday at $13,unchanged from the day before.
In April, Sugen pulled a public offering of 3.5 million shares after itsstock fell 13 percent during the company's road show. Sugen officialsblamed short-sellers for the drop. (See BioWorld Today, April 26,1996, p. 1.)
In early October, Sugen negotiated a collaboration with AllerganInc., of Irvine, Calif., for development of drugs that inhibit cellsignaling pathways involved in angiogenesis, which is the formationof blood vessels, for treatment of ophthalmic disorders, such asmacular degeneration and diabetic retinopathy.
Allergan paid $2 million up front and bought $4 million in Sugenstock at $20.88 per share, a premium to the market price. Allerganalso agreed to purchase $3 million worth of Sugen stock in thecurrent public offering and will contribute milestone payments andresearch funds to Sugen during the collaboration.
Sugen's other major drug discovery effort is aimed at cancer.
The company's non-cytotoxic approach to fighting diseases focuseson developing compounds that target specific signal transductionpathways, which are routes exterior cell signals take to reach thenucleus in turning genes on and off.
Sugen is targeting cell signaling pathways regulated by three largefamilies of receptors _ tyrosine kinases, tyrosine phosphates andserine-threonine kinases. The three receptor-types are involved incellular growth, maturation, migration, metabolism and survival.
In its oncology program, Sugen has collaborations with ZenecaGroup, of London, and Astra Medica AG, of Frankfurt, Germany,worth up to a combined $80 million.
Sugen also is developing cancer drugs itself. Its most advancedcompound, SU101, is designed to inhibit a pathway controlled by theplatelet-derived growth factor receptor tyrosine kinase, which isinvolved in cell growth. Malfunctions of the signaling pathway arelinked to a variety of cancers, including brain, ovarian, prostate andlung cancers.
The drug, SU101, is in three Phase I trials and a Phase I/II study.Indications include malignant glioma and other solid tumors.
As of June 30, 1996, Sugen had $40 million in cash and reported anet loss of $8.45 million for the first six months of the year. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.