Neurocrine Biosciences Inc. is going public with a bang as itannounced a significant multiple sclerosis (MS) collaborationWednesday along with its registration for a 3-million-share initialoffering.

The deal with Ciba-Geigy Ltd., valued initially at $37 million,centers around Neurocrine's altered peptide ligands, which in thiscase are peptide analogues of myelin basic protein. The modifiedpeptide reversed MS-like paralysis in mice models of the disease.Those results were published in an article this year in Nature. (SeeBioWorld Today, Jan. 25, 1996, p. 1.) Neurocrine, of San Diego,hopes to begin clinical trials of a drug candidate this year.

Ciba, of Basel, Switzerland, purchased $5 million in Neurocrinestock and will buy another $5 million at the initial public offering(IPO) price. In addition Ciba will pay $12 million over two years toNeurocrine in license fees and research and development funding.The deal includes another $15.5 million in research and developmentsupport after the initial two years, as well as undisclosed "substantial"milestones.

Neurocrine's second significant collaboration, signed last year withthe Johnson & Johnson division, Janssen Pharmaceutica N.V., ofBeerse, Belgium, is focused on developing small molecules thatantagonize the corticotropin releasing factor (CRF) receptor. Diseasetargets in that alliance are anxiety, depression and substance abuse.

Neurocrine proposed the sale of 3 million shares at $8 to $10 each.Separately Ciba will make a $5 million equity investment andJohnson & Johnson Development Corp. will purchase $2.5 million instock at the price it comes to market. In total 3.8 million shares willbe sold, after which Neurocrine will have 16.2 million sharesoutstanding. It has co-promotion rights in North America in bothcollaborations.

The company was founded in 1991 with $3 million in venture capitalfrom Avalon Medical Partners, of La Jolla, Calif.; Kleiner PerkinsCaufield and Byers, of Menlo Park, Calif.; and D. Blech & Co., ofNew York. Blech no longer has a stake in Neurocrine.

The scientific founders are Wylie Vale, a professor of peptidebiology at the Salk Institute for Biological Studies, and LawrenceSteinman, professor of neurological science at Stanford University'sSchool of Medicine.

Post-offering, Neurocrine's largest shareholder will be KleinerPerkins, with a 10 percent stake. Ciba-Geigy will own 7.4 percent ofthe company, and Abingworth Bioventures, of London, will hold 5.4percent.

Early in 1994 Neurocrine raised $30 million in a private placement.The company reported on March 31, 1996, having about $20.5million in cash.

In its collaboration with Janssen, Neurocrine is trying to block theoverproduction of CRF. They hope to go into preclinical studies thisyear. (See BioWorld Today, Feb. 17, 1995, p. 1.)

A third program at Neurocrine is in the area of neurosteroids. Thecompound DHEA (dehydroepiandrosterone), which Neurocrinelicensed, is in a physician's sponsored Phase II trial for Alzheimer'sdisease.

An early stage program at Neurocrine is in neurogenomics, which isgeared toward discovery of genes for central nervous systemdisorders. n

-- Jim Shrine

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