Neurocrine Biosciences Inc. increased the size and price of its initialpublic offering (IPO) that completed Thursday and grossed nearly$37 million. The San Diego company raised another $7.5 millionfrom investments at market price by two corporate collaborators.

Neurocrine sold 3.5 million shares at $10.50 per share for grossproceeds of $36.75 million. In addition Ciba-Geigy Ltd. purchased$5 million in stock and Johnson & Johnson Development Corp.invested $2.5 million at the offering price.

In April 1996 Neurocrine (NASDAQ:NBIX) proposed an offeringconsisting of three million shares priced at $8 to $10 each. The stockclosed at $12.50 its first day in trading of 4.2 million shares.Robertson Stephens & Co., of San Francisco; Alex. Brown & SonsInc., of New York; and Montgomery Securities, of San Francisco,underwrote the offering.

Neurocrine was founded in 1991 with $3 million in venture capitaland raised another $30 million in a 1994 private placement. Thecompany is developing therapeutics for diseases of the centralnervous and immune systems through four program areas.

"We are very excited about completing this offering as quickly as wewere able to and have it oversubscribed," said President and CEOGary Lyons. "We plan to put the proceeds to very good use.

"The market remains strong," said Lyons, back from the road show."It is getting crowded out there but the quality stories are doing wellas evidenced by some of the successful biotech IPOs that have closedin the past month or so. Neuroscience remains a very strong sectorand that was a big part of our appeal. Having strong corporatecollaborations helped the story."

Lyons said Neurocrine, which now has more than $70 million, plansto use the money to help accelerate commercialization by in-licensingneuroimmunology-related products that are at least in Phase IIstudies; to allow the company to get early stage programs into clinicaltrials before partnering them; and to broaden its research portfolio.

One of Neurocrine's programs is focused on the neuropeptidecorticotropin releasing factor (CRF), a signaling molecule thatcoordinates the brain, endocrine system and immune response tostress. The company said it has multiple strategies to modulate CRF,which could lead to many product opportunities.

With the Johnson & Johnson division Janssen Pharmaceutica N.V.,of Beerse, Belgium, Neurocrine is developing small molecules thatantagonize the CRF receptor. Targets in that $30 million-plusalliance are depression, anxiety and substance abuse. SeparatelyNeurocrine is developing small molecules to block CRF bindingprotein, thereby increasing CRF levels, which could be useful forAlzheimer's disease and obesity. The company hopes to select a leadcandidate in each indication later this year.

Another company program is in altered peptide ligands. The idea isto alter peptide ligands to bind to and inhibit disease-causing T cells.

Neurocrine and Ciba, of Basel, Switzerland, announced acollaboration, initially valued at $37 million, in that area whenNeurocrine filed for its IPO. The companies are using peptideanalogues of myelin basic protein for treating multiple sclerosis.They hope to be in human clinical studies this year.

The company's third and fourth programs, in neurosteroids andneurogenomics, are being developed in a partnership with sevenCanadian institutional investors, which in April 1996 contributed$9.5 million for a 51 percent stake in the new company:Neuroscience Pharma Inc., of Montreal.

In the neurosteroid area, a Neurocrine molecule is in a physician'ssponsored Phase II trial for Alzheimer's disease. The goal is to slowmemory deterioration.

In neurogenomics the company is trying to identify genes in the braininvolved in neurodegeneration. The focus of the early stage programis on the function of those genes.

Neurocrine now has about 16.2 million shares outstanding. Thelargest shareholder is Kleiner Perkins Caufield and Byers, of MenloPark, Calif., with a 10 percent stake. Ciba owns 7.4 percent of thecompany and Abingworth Bioventures, of London, has a 5.4 percentstake. n

-- Jim Shrine

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