Matrix Pharmaceuticals Inc., with its lead product under review in theU.S. and poised for approval in Europe, emerged from an equityoffering Tuesday with more than $62 million in gross proceeds fromthe sale of 2.75 million shares.

"We were pleased with our performance in what appears to be asoftening market," observed Beverly Holley, director of corporatecommunications and investor relations for Matrix.

When the Fremont, Calif.-company registered March 1, 1996, to sell2.5 million shares, its stock (NASDAQ:MATX) was trading at about$20. Demand added 250,000 shares to the offering and it was priced13 percent higher at $22.63 per share for a total of $62.2 million. Netproceeds to Matrix are $58.4 million.

The offering was aimed at raising funds to move drug candidates intoclinical development. Some money also is earmarked forcommercializing AccuSite Injectable Gel for genital warts, butfunding to support Matrix's first marketable product was the focus ofan October 1995 equity financing, which raised $54 million in grossproceeds.

AccuSite, a biodegradable protein matrix designed for direct deliveryof approved chemotherapeutic agents to disease sites followed bysustained release of the drugs, is under review by the FDA and maybe launched in the U.S. by mid-1997. The product is expected to beon the market in Europe later this year.

Matrix officials have said of the 6.7 million people in the U.S. withgenital warts, 2 million receive treatment each year. In Europe about1 million new cases of the disease are diagnosed annually.

The AccuSite gel and a similar drug delivery product, IntraDoseInjectable Gel, are in late-stage clinical trials for other diseases. Theformer is in two Phase III studies for basal cell cancer and the latter isbeing evaluated in Phase III trials for head and neck cancers.

Drug candidates in Matrix's pipeline also are aimed at cancer. Holleysaid decisions have not been made on specific products that willmove into clinical development first.

Among the possibilities are radiosensitizers for improving the effectof radiation; tublin-binding drugs, which interfere with cancer celldivision; and topoisomerase inhibitors, which block cancer cellgrowth by inhibiting enzymes that facilitate DNA replication.

Matrix ended 1995 with $77.3 million in cash and reported a net lossfor the year of $26.6 million. Following the offering, the companyhas about 20.6 million shares outstanding.

Matrix's stock closed Tuesday at $22.87, up 25 cents.

Underwriters for the public offering were Cowen & Co., Dillon Read& Co. and UBS Securities LLC, all of New York. They have optionsto purchase another 412,500 shares to cover overallotments. Ifexercised, Matrix would receive another $9.3 million. n

-- Charles Craig

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