Magainin Pharmaceuticals Inc. went into a follow-onpublic offering earlier this month hoping to raise at least$16 million through the sale of 2 million shares andemerged with more than double that amount after demandpushed the number of shares and their price considerablyhigher.
The Plymouth Meeting, Pa.-based company said investorinterest increased the size of the offering to 3.5 millionshares at $10 per share for net proceeds of $32.9 million.When Magainin registered with the Securities andExchange Commission to sell 2 million shares Aug. 4,1995, its stock (NASDAQ:MAGN) was trading at $7.88.The company ended Wednesday at $10, down 25 cents.The offering, which became effective Wednesday, isexpected to close Monday.
Michael Dougherty, Magainin's chief financial officer,said funds from the offering boost the company's cashposition to $50 million, giving it sufficient resources fortwo years of operation.
"We had good interim results from our pivotal trial forour drug, MSI-78," he said, "and we have a goodtechnology story underlying that. We got out a little bitand told that story and the result speaks for itself."
Magainin's performance also was helped by an apparentturn around in Wall Street's general attitude towardbiotechnology companies. The successful receptionsgiven offerings in the past several months have causedanalysts to speculate that the industry is generatingrenewed confidence among investors.
Companies generating much of the attention are thosesuch as Magainin with positive late-stage clinical trialdata. Magainin's MSI-78 is a topical cream in Phase IIIclinical trials for infections associated with diabetic footulcers. The drug, which is derived from peptides on theskin of frogs, is being tested against the standard oralantibiotic therapy, ofloxacin.
In June, Magainin said an interim analysis of the studyshowed MSI-78 was as effective as ofloxacin. The PhaseIII trial is one of two being conducted. Both studiesshould be complete by the third quarter of 1996.
Among MSI-78's anticipated advantages over ofloxacinare that it will destroy organisms that have becomeresistant to the antibiotic and will not have ofloxacin'sside effects.
MSI-78 is an analog of an amino acid compound thatprotects the skin of African clawed frogs from a broadspectrum of infections. The peptides are called magaininsand the company has made 2,000 derivatives of thenatural compounds.
The magainins are believed to have activity against gramnegative and gram positive infections as well as anaerobicand fungal organisms. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.