Ergo Science Corp., which is developing drugs for diabetes andobesity, raised $35 million through the sale of nearly 2.9 millionshares in its first trip back to the equity markets following an initialpublic offering (IPO) in December 1995.
The Boston-based company sold 2.87 million shares, which included375,000 shares purchased by the underwriters, Cowen & Co., UBSSecurities LLC and Needham & Co. Inc., all of New York. ErgoScience has 13 million shares outstanding.
The company's $12.25 per share offering price represented a 36percent increase over its IPO price of $9 per share. However, whenthe company registered for the equity sale in July 1996, its stock(NASDAQ:ERGO) was trading at $16.75.
Referring to the summer slump in biotechnology stocks, ErgoScience's senior vice president, Thomas Thurman, said, "We are verypleased that we were able to complete this offering in what is a toughstock market environment."
Ergo Science closed Tuesday off 25 cents to $13.12.
The company's lead product, Ergoset, has completed two Phase IIItrials for treatment of Type II diabetes. Ergo Science said preliminarydata from the studies, which involve 500 patients, showed the drugused with sulfonylurea agents improved "control of glucose,triglycerides, free fatty acids and cholesterol."
A third Phase III trial, evaluating Ergoset as a monotherapy, isscheduled to be complete by the end of this year. Ergo Scienceexpects to file a new drug application in 1997.
Ergoset is an oral form of bromocriptine, which is a genericdopamine agonist approved by the FDA for treatment of Parkinson'sdisease. Dopamine is a neurotransmitter involved in the control of fatmetabolism. Obesity is closely linked to Type II, or non-insulindependent, diabetes.
Ergo Science also is researching use of bromocriptine, an agonist ofthe D2 dopamine receptor, with another molecule to stimulate the D1dopamine receptor to treat obesity. (See BioWorld Today, June 10,1996, p. 1.)
In addition to focusing on metabolic disorders, the company also isdeveloping treatments for cancer.
Ergo Science's net proceeds from its follow-on offering totaled $33million. As of June 30, 1996, the company reported $9.4 million incash and a net loss of $8.2 million for the first six months of the year.The company had a net loss of $22.1 million for 1995. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.