Transcend Therapeutics Inc. is going public to raise about $26million to continue development of its lead drug candidate, which isdesigned to limit tissue damage caused by inflammatory responsesthat produce excessive quantities of toxic oxygen molecules.
The Cambridge, Mass., company expects to begin Phase III trials ofthe product, called Procysteine, for acute respiratory distresssyndrome (ARDS) early next year.
Transcend has registered for an initial public offering (IPO) of twomillion shares in an anticipated range of $12 to $14 per share. Basedon a price of $13, the IPO would raise $26 million in gross proceeds.
Underwriters Vector Securities International Inc., of Deerfield, Ill.,have an overallotment option to purchase another 300,000 shares,which would generate $3.9 million.
In its IPO prospectus, Transcend said the equity financing is expectedto support the company's operations for at least 18 months.
Nearly half of the funding will be used for continued clinicaldevelopment of Procysteine. The drug boosts cellular production ofglutathione, a peptide that neutralizes toxic oxygen molecules, whichare called reactive oxygen species (ROS). The immune systemgenerates ROS to kill infections. However, overproduction of thetoxic agents can damage tissues.
Transcend Therapeutics said the abnormal generation of ROS andresulting oxidative damage are linked to ARDS as well as otherconditions, such as amyotrophic lateral sclerosis, atheroscleroticcardiovascular disease and multiple organ dysfunction.
Procysteine, which is being developed in oral and injectable forms,delivers cysteine, an amino acid, into cells to assist in their generationof glutathione.
In two Phase II trials for ARDS, the company said Procysteine, whencompared with a placebo, demonstrated patients were able to rely lesson a mechanical respirator to breathe. ARDS affects about 150,000patients a year and is triggered by inflammation to the lungsstimulated by conditions such as infection or trauma.
As of June 30, 1996, Transcend reported about $550,000 in cash anda net loss of $2.2 million for the first six months of the year. In 1995,the company reported a net loss of $4.5 million.
Transcend, formerly called Free Radical Sciences Inc., was foundedin 1993 as a spin-off of Clintec Nutrition Co., of Glendale, Calif.,which is a joint venture between Baxter Healthcare Corp., ofDeerfield, Ill., and Nestle SA, of Lausanne, Switzerland.
Baxter and Clintec are Transcend's largest shareholders. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.