Demand pushed Sequana Therapeutics Inc.'s follow-on offering200,000 shares higher to 1.7 million for gross proceeds of $32.3million, but the per-share price represented an 18 percent drop fromwhen the genomics company registered last month for the stock sale.

In February 1996 Sequana, of La Jolla, Calif., trading at $23.25, saidit was selling 1.5 million shares in an equity financing expected togenerate about $35 million. The offering was priced at $19 per shareafter the market closed Wednesday.

The company's stock (NASDAQ:SQNA) closed Thursday at $19,down 25 cents.

Sequana's 1995 fiscal report showed it ended the year with $41.3million in cash and a net loss of $6 million.

Rather than sequencing genes at random, Sequana is targetingdisease-causing genes and their functions for development of drugsand diagnostics.

Genomics, considered an essential science for new drug discovery,has attracted the attention of Wall Street. Five publicly tradedcompanies, including Sequana, have enjoyed dramatic success overthe past two years even as the biotechnology sector in general wasexperiencing a decline in investor interest.

Since Sequana went public in August 1995 at $9 per share, its stockas of Thursday was up more than 110 percent.

Sequana's research focuses on discovery of genes involved in cancer,diabetes, asthma, osteoporosis, obesity, schizophrenia, manicdepression and inflammatory bowel disease.

The company in January 1996 reported it found a gene associatedwith hereditary melanoma, a potentially fatal skin cancer, and hasfiled a patent application with the National Cancer Institute.

Sequana has negotiated gene discovery collaborations withBoehringer Ingelheim GmbH, of Ingelheim, Germany, for asthma;Corange Ltd., of Bermuda, and its subsidiary, Boehringer MannheimGmbH, of Mannheim, Germany, for osteoporosis; and GlaxoWellcome plc, of London, for type II diabetes.

The Ingelheim and Corange deals could be worth up to more than$120 million in research funding and milestone payments to Sequana.Financial terms of the Glaxo agreement were not disclosed.

Managing the offering for Sequana were Hambrecht & Quist LLC,Lehman Brothers Inc. and Punk, Ziegel & Knoell L.P., all of NewYork. The underwriters have options to purchase another 255,000shares to cover overallotments.

Following the offering Sequana has about 9.8 million sharesoutstanding. n

-- Charles Craig

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