Arris Pharmaceutical Corp. is attempting to more than double its cashposition with a follow-on public offering of 3 million shares aimed atraising $43.5 million.
In its year-end fiscal report, the South San Francisco company said itended 1995 with $31 million in cash, about $1 million more than the$30 million it had to start the year.
Arris recorded a net loss for 1995 of $1.2 million, or 14 cents pershare, excluding a fourth-quarter charge of $22.5 million, or $2.57per share, related to the takeover of Khepri Pharmaceuticals Inc., ofSouth San Francisco.
Arris registered Tuesday for its follow-on offering. Funds from theequity financing will be used to expand its protease inhibitor drugdevelopment program, which was strengthened in November 1995with the acquisition of Khepri for $21 million in Arris stock. As ofDec. 31, 1995, Arris had 8.7 million shares outstanding.
Arris is targeting proteases, such as the mast cell protease tryptase,which is an enzyme believed to be a mediator of inflammatorydiseases.
The company's lead product, APC 366, is a small moleculecompound aimed at inhibiting tryptase for treatment of asthma. Thedrug is in Phase IIa trials under a collaboration with Bayer AG, ofLeverkusen, Germany. The pharmaceutical company is working withArris on tryptase and another protease, chymase, which also isimplicated in inflammatory disorders.
The Khepri acquisition gave Arris an added expertise in cysteineproteases, which are linked to a wide range of diseases, such asarthritis, cancer metastasis and Alzheimer's disease.
Financing from Arris' public offering also will help fund Arris' othermain drug discovery effort, a receptor-based program aimed atdeveloping oral forms of small molecule compounds that mimictherapeutic proteins, such as erythropoietin (EPO) and human growthhormone. Arris has a collaboration with Amgen Inc., of ThousandOaks, Calif., for EPO and with Pharmacia & Upjohn, of Kalamazoo,Mich., for growth hormone.
Arris also is working with Pharmacia & Upjohn on inhibitors ofproteases involved in blood clotting.
Based on the $14.50 closing price Tuesday of Arris' stock(NASDAQ:ARRS), the 3 million share offering would generate grossproceeds of $43.5 million. Arris' shares ended the day down $1.
Cowen & Co., of New York, and Hambrecht & Quist LLC andRoberston, Stephens & Co., both of San Francisco, are underwritersfor the offering. They have an option to purchase an additional450,000 shares for overallotments.
The company's 1995 net loss of $1.2 million last year was an 85percent reduction from the 1994 net loss of $8.3 million. In its fiscalreport, Arris said revenues from corporate collaborations doubled in1995 to $16.7 million from $8.3 million in 1994. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.