Sugen Inc., which is developing small molecule drugs to offsetdysfunctional cell signaling pathways linked to cancer growth,registered for a follow-on offering of 3.5 million shares to generateabout $50 million.
The Redwood City, Calif., company, which went public in October1994, has negotiated drug discovery collaborations with twopharmaceutical firms _ Zeneca Group, of London, and Astra MedicaAG, of Frankfurt, Germany. Combined, the two agreements _ bothtargeting cancers _ could be worth up to more than $80 million forSugen.
Sugen's non-cytotoxic approach to fighting cancer focuses ondeveloping compounds that target specific signal transductionpathways, which are routes exterior cell signals take to reach thenucleus in turning genes on and off. Sugen hopes to treat cancer byblocking signals on specific malfunctioning pathways.
The company's technology focuses on two large families ofreceptors, tyrosine kinases and tyrosine phosphates, which areconsidered key regulators of cellular growth, maturation, migration,metabolism and survival.
Sugen is conducting two Phase I trials with a platelet-derived growthfactor receptor antagonist, called SU101, for malignant glioma andsolid tumors. Phase II and Phase II/III studies are expected to beginthis year.
In addition to cancer, Sugen intends to target diseases, such asdiabetes and psoriasis, and neurologic and cardiovascular disorders.The company also expects to license cancer compounds in late-stagedevelopment from other firms.
Based on the $13.50 closing price Wednesday of Sugen's stock(NASDAQ:SUGN), the company would raise more than $47 millionfrom the offering. Half the 3.5 million shares will be sold in the U.S.and the other half overseas. Lehman Brothers, of New York, willcoordinate the placement.
At the end of 1995, Sugen had $53 million in cash and reported a netloss for the year of $12 million. Following the equity financing Sugenwill have 14.1 million shares outstanding. n
-- Charles Craig
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