Introgen Therapeutics Inc., which is targeting gene therapy fortreating cancer, is wading into the capital markets with an initialpublic offering despite a recent general recoil of investor interest thathas forced at least two biotechnology companies to postpone IPOs.

Introgen, of Austin, Texas, registered Tuesday to sell 3.2 millionshares. The company did not specify a projected price range.Following the offering Introgen would have 10.9 million sharesoutstanding.

Underwriters PaineWebber Inc., of New York, and Genesis MerchantGroup, of San Francisco, have options to purchase another 480,000shares to cover overallotments.

Introgen is developing two in vivo gene therapy approaches tofighting cancer: one focusing on p53 tumor suppressor genes and theother, K-ras oncogenes.

When healthy the p53 gene is believed to prevent abnormal cellgrowth. K-ras oncogenes are normally inactive, but when mutated arebelieved to boost rapid cell growth.

In October 1994, Introgen entered a potential $50 millioncollaboration with Rhone-Poulenc Rorer, of Collegeville, Pa., todevelop gene therapies based on both the p53 gene and K-rasoncogene.

Introgen is venturing into the public equity markets as otherbiotechnology start-ups are heading out to wait until conditionsimprove. Biotechnology stocks fell into a summer slump following arecord-setting year in which share prices soared and companies raisedmore than $5 billion in initial and follow-on offerings.

In the past two months, at least two companies have postponed IPOs.Aviron Inc., a Mountain View, Calif., vaccine company, delayed itsoffering in late July 1996 and has allowed the registration to expire.Progenitor Inc., a Columbus, Ohio, gene therapy and functionalgenomics company, decided last Friday to wait until marketconditions rebound before pricing its IPO.

Both Aviron and Progenitor registered for their offerings in June1996, just as investors began to retreat from biotechnology stocks.

Some analysts expect the bullish mood to return this fall. ArQuleInc., a combinatorial chemistry company in Medford, Mass., also isbraving the IPO market, registering last week to sell 2 million shares.

Introgen's most advanced products are its p53 gene therapy drugs.The company is testing use of adenoviral and retroviral vectors todeliver healthy tumor suppressor genes to cancer sites. Defective p53genes have been associated with half of all cancers.

In its IPO prospectus, Introgen said early data from Phase I/II studiesof p53 gene therapy using both types of delivery vehicles revealed novector-related toxicity.

The company said clinical trials with retroviral vectors involving ninelung cancer patients showed three patients experienced tumorregression. In three other patients, tumors stabilized.

Introgen said data from studies of p53 gene therapy using adenoviralvectors for treatment of lung cancer and head and neck cancershowed "an increase in p53 expression, programmed cell death andtumor necrosis" at the disease sites.

Introgen expects to begin more advanced clinical trials in the next 12to 18 months with its p53 gene therapy.

In its collaboration with Rorer, the pharmaceutical company isfunding research and development of the gene therapy products andhas rights to manufacture and commercialize the therapies in Europe.Introgen and Rorer have co-promotion rights in North America,Japan, Korea, India, China and Australia. Introgen retainsmanufacturing rights in North America.

Introgen, in targeting K-ras oncogenes, has developed a gene therapydesigned to block the cancer genes' activity.

In addition to funding research and development at Introgen, Rorerhas agreed to purchase $6 million worth of stock in Introgen's IPOand make another equity investment next year.

Rorer is a majority-owned subsidiary of the Rhone-Poulenc Group inParis. n

-- Charles Craig

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