Intercardia Inc., which has a drug in Phase III and a U.S.marketing partner, filed Monday for an initial publicoffering of 2.2 million shares expected to be pricedbetween $12 and $14.

The company is 88 percent owned by InterneuronPharmaceuticals Inc., which would have its stake reducedto less than 60 percent if the deal goes off as proposed.Currently Intercardia has 4.4 million shares outstanding.Its drug bucindolol is in Phase III trials for congestiveheart failure.

Interneuron, of Lexington, Mass., acquired rights tobucindolol last year when it purchased privately heldCardiovascular Pharmacology and EngineeringConsultants (CPEC), of Denver. Owners of CPEC got aminor stake in the spin-off company, Intercardia, whichlater was relocated to Research Triangle Park, N.C.

The Phase III trial of the synthetic small molecule,described as non-selective third-generation beta-blocker,is being run in conjunction with the National Institutes ofHealth and the Department of Veterans Affairs. Thegovernment is funding a large portion of the study, whichis called the Beta-blocker Evaluation of Survival Trial(BEST), started last June and could involve 3,000patients.

But the study is continuously being monitored so resultsshowing achievement of statistical significance couldcome before that many patients are treated.

Patients in the study are those who remain highlysymptomatic with Class III or IV heart failure despiteprevious therapy. Patients will continue on their standardtherapy and be randomized to receive bucindolol orplacebo. Mortality is the primary endpoint.

Last week Intercardia signed a deal with Astra MerckInc., of Wayne, Pa., encompassing U.S. development andmarketing of bucindolol. Astra Merck made a $5 millionpayment to Intercardia. They will share development andinitial marketing costs. Intercardia still can realize $15million in milestones based upon FDA approval andachievement of goals related to net sales. Also,Intercardia will get royalties of about 15 percent for salesup to $110 million and 30 percent on sales in excess of$110 million over a one-year period.

Interneuron's stock (NASDAQ:IPIC) lost 50 centsMonday to close at $19.50. n

-- Jim Shrine

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