Jim Shrine

Neurogen Corp. said Friday that it completed a publicoffering of 2.5 million shares that grossed $40 million.

The stock sold at $16 per share, nearly three times theprice it was trading at in the beginning of the year. Theoffering was managed by Smith Barney Inc., of NewYork, and Robertson Stephens & Co. L.P. and PacificGrowth Equities, both of San Francisco. (See BioWorldToday, July 11, 1995, p.1.)

In keeping with the momentum of recent public offerings,Neurogen said there were orders for more than 5.5million shares.

"We had determined early on that increasing the size ofthe offering would be a possibility," said Stephen Davis,Neurogen's vice president and chief financial officer."We decided we didn't want to do that. We didn't want todilute shareholders any more than necessary to raise theproceeds we were looking for."

Neurogen, of Branford, Conn., now has 12.6 millionshares outstanding. Its cash position, with the offeringand a recent payment from Schering-Plough Corp., hasgone from $14 million at the end of March to the currentlevel of about $68 million. The company expects a netloss of about $7 million this year.

"We found the market very receptive," Davis said. "Wewere anxious to get on the road, and very pleased with thefact that the stock appreciated during the road show."

The stock closed at $15.25 when the company announcedthe offering of 2.5 million shares.

Neurogen said it would use the money primarily to funddevelopment of drugs outside its collaborations withSchering-Plough, of Madison, N.J., and Pfizer Inc., ofNew York. Both deal with disease of the central nervoussystem. In July Neurogen received $17 million fromSchering-Plough in a potential $70 million collaborationto develop drugs that bind to specific dopamine receptorsubtypes, with the lead indication being schizophrenia.

Neurogen's lead unpartnered compound, an anti-obesitydrug called NGD 95-1, is designed to block the action ofthe neurotransmitter NPY1, a protein that stimulateseating. Davis said the compound is expected to be takeninto human studies in early 1996. The company has otherpreclinical programs in epilepsy, depression and stressdisorders.

Neurogen's stock closed Monday at $16.75 per share, up50 cents. n

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