Neurogen Corp. registered to sell 2.5 million shares in a publicoffering that would raise more than $38 million, based on Monday'sclosing price.
The Branford, Conn., company, which just received $17 million up-front from a deal with Schering-Plough Corp., had about $14 millionin cash at the end of March. Its net burn rate in 1994 was $7 million,and the company appears to be spending a similar amount this year.Neurogen currently has about 10.1 million shares outstanding. Its stock(NASDAQ:NRGN) closed down 25 cents Monday at $15.25.
The offering is being managed by Smith Barney Inc., of New York;Robertson, Stephens & Co. L.P., of San Francisco; and Pacific GrowthEquities, of San Francisco.
The company plans to use the money from the offering to funddevelopment of compounds outside collaborations with Schering-Plough and Pfizer Inc.
Schering-Plough, of Madison, N.J., is collaborating with Neurogen oncompounds that bind to specific dopamine receptor subtypes. (SeeBioWorld Today, June 16, p.1.) That deal potentially is worth $70million to Neurogen. The deal with New York-based Pfizer Inc.focuses on development of drugs that interact with receptor subtypes ofthe gamma-amino butyric acid receptor family.
Separately, Neurogen is working on compounds that affect theneurotransmitter NPY1, particularly as they relate to eating disorders.The company also has preclinical programs in epilepsy and seizures,depression and stress disorders.
Neurogen has said that it is implementing a "ratcheted growth strategy"in which the company will enhance its development role throughsuccessive corporate collaborations. _ Jim Shrine
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