Pathogenesis Corp. grossed more than $40 million from a publicoffering that increased both in the shares and price from the originalfiling date.

The Seattle company said late Thursday it sold 2.5 million shares at$16.26. Pathogenesis on April 3, 1996, proposed selling two millionshares when its stock closed at $15.

What appeared to draw investors' interest was the company's late-stage pipeline, which includes ongoing Phase III trials and a series ofPhase IIs that will be started in the second half of this year, saidBruce Montgomery, senior vice president of research anddevelopment for Pathogenesis.

"Investors want to see major accomplishments within two years,"Montgomery said. "They were focused on the near-term Phase IIIresults and our strong pipeline."

Pathogenesis now has about 13.3 million shares outstanding, and hadmore than $30 million on hand before the offering. UnderwritersPrudential Securities Inc., of New York, Montgomery Securities, ofSan Francisco, and Needham & Co. Inc., of New York, have anoverallotment option on another 375,000 shares.

Pathogenesis stock (NASDAQ:PGNS) rose Friday on the news,gaining $1.25 to close at $17.25.

The company's most advanced product is TOBI, or tobramycin forinhalation, which is in two double-blind, placebo-controlled Phase IIItrials for treating chronic lung infections in cystic fibrosis patients.Montgomery said results from the studies should be available by theend of the year or early next year.

Phase II studies of TOBI are expected to begin in the second half ofthis year in bronchiectasis, a form of severe chronic bronchitis, and incontagious tuberculosis. Another drug candidate, PA-1648 _ aderivative of the antibiotic rifampin _ is expected to be taken intoPhase II trials later this year in Mycobacterium avium complex andtuberculosis, Montgomery said. n

-- Jim Shrine

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