Neurobiological Technologies Inc., which went public inFebruary 1994, is heading back to the public markets tosell another 2 million shares primarily to institutionalinvestors.

The Richmond, Calif.-based company registered for theoffering Wednesday. Based on the $3.75 closing price ofNeurobiological's stock (NASDAQ:NTII), it would raise$7.5 million in the stock sale.

Neurobiological, at the end the third quarter of this year,said it had about $7.7 million in cash. It reported a netloss for 12 months, ending June 30, 1995, of $5.3million. Following the offering, the company will havenearly 6 million shares outstanding.

Van Kasper & Co., of San Francisco, and Gerard KlauerMattison & Co. LLC, of New York, are placement agentsfor the stock sale.

Neurobiological's lead compound, corticotropin-releasingfactor (CRF), is an anti-inflammatory drug and is beingtested in clinical trials for treating symptoms associatedwith brain tumors, chronic asthma and rheumatoidarthritis.

Results released Wednesday from a Phase I/II trial ofCRF for rheumatoid arthritis showed the drug was "well-tolerated at lower doses and appeared to reduce jointinflammation," said Neurobiological officials.

Michael Ostrach, executive vice president and chiefoperations officer for Neurobiological, said CRF isdesigned to reduce leakage from small blood vessels ofplasma proteins and white blood cells that contribute tothe inflammatory process. CRF, a naturally occurringhuman peptide produced inside and outside the brain,appears to inhibit the inflammatory mediators that causevascular leakage near tissue damage.

A Phase II, placebo-controlled, trial of CRF is expectedto begin in the first quarter of 1996 and will involve 100rheumatoid arthritis patients.

In addition to CRF, Neurobiological is developingmemantine, an oral compound, for treatment ofneurodegenerative diseases, such as Alzheimer's diseaseand AIDS-related dementia. A Phase II trial is expectedto begin in mid-1996 for AIDS-related dementia andneuropathic pain.

Memantine is an antagonist of the N-methyl-D-aspartate(NMDA) receptor, which is a subtype of the glutamatereceptor. Ostrach said overstimulation of glutamatereceptors is believed to contribute to injury of neurons. InAIDS patients HIV has been found to activate the NMDAreceptors, resulting in neuron damage that can lead todementia.

Another product, dynorphin A, is being developed as anadjunct for pain treatments, such as morphine. The drugis part of a family of naturally occurring peptides calledendorphins and is designed to boost the pain relievingactivity of morphine and other opioid drugs, allowingthem to be used at lower doses. n

-- Charles Craig

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