CollaGenex Inc., poised to file a new drug application (NDA) thisyear for its lead product to treat periodontitis, generated grossproceeds of $20 million from its initial public offering (IPO) of 2million shares.

The Newtown, Pa., company's IPO was priced at $10 per share andthe stock (NASDAQ:CGPI) debuted Thursday, closing at $9.12.

CollaGenex registered for the offering in May 1996 and planned tosell 2.15 million shares in a projected range from $13 to $15. Thecompany has about 7.7 million shares outstanding following the IPO.

Underwriters Alex. Brown & Sons Inc., of Baltimore, and VolpeWelty & Co., of San Francisco, have options to buy another 300,000shares to cover overallotments.

CollaGenex ended March 31, 1996, with $5 million in cash and a netloss of $1.3 million for the first three months of this year. It reporteda 1995 net loss of $5.3 million.

CollaGenex has completed three Phase III trials of its lead product,Periostat, for periodontitis.

In its IPO prospectus, CollaGenex describes Periostat as a sub-antibiotic dose (20mg) of doxycycline, an active ingredient in FDA-approved drugs for fighting microbial infections. The compoundinhibits collagenase, which is an enzyme that breaks down connectivetissue allowing gums to recede from teeth. By using a low dose ofdoxycycline, the company said, Periostat does not trigger anti-microbial action, eliminating complications associated with normalantibiotics.

The Phase III studies, CollaGenex has said, successfullydemonstrated Periostat's ability to reduce loss of gum attachment.

The company has other development programs based on usingcompounds from established antibiotics to inhibit enzymes thatdestroy connective tissues in the body. CollaGenex's pipelineincludes drugs targeting cancer metastasis, diabetic nephropathy,osteoarthritis, rheumatoid arthritis and osteoporosis. n

-- Charles Craig

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