SunPharm Inc. raised $7.7 million in an initial public offering (IPO)of 1.1 million units to help fund continued development of its twolead products, diethylhomospermine (Dehspm) for AIDS-relatedchronic diarrhea and diethylnorspermine (Denspm) for cancer.
Both drug candidates, which are in Phase I clinical trials, are smallmolecules consisting of polyamine analogues, which are designed toenter cancer cells and inhibit their growth and proliferation. In thecase of Dehspm, SunPharm researchers said the analogue alsoinhibits secretion of fluid into the gastrointestinal tract and mayprevent a primary cause of AIDS-related diarrhea.
SunPharm, of Jacksonville, Fla., will receive about $7 million in netproceeds from the IPO, which was underwritten by RoyceInvestment Corp., of Woodbury, N.Y., and Americorp SecuritiesInc., of New York.
The units sold consist of one common share and one three-yearwarrant, which is redeemable anytime for one common share at$8.75 through January 1998. In addition, a year after the IPO,SunPharm can repurchase the warrants at 5 cents per share if theprice of the common stock exceeds $12.25.
The company's stock (NASDAQ:SUNP) closed at $7.25 followingthe IPO.
SunPharm is developing Denspm as a cancer treatment incollaboration with Warner-Lambert Co., of Morris Plains, N.J., andJapan-based Nippon Kayaku Co. Phase I trials of Denspm areexpected to be complete in the first half of this year. Warner-Lambert has worldwide rights to manufacture and sell Denspm forcancer, except in Japan, where Nippon Kayaku has licensed thoserights.
SunPharm is conducting its own trials for development of Dehspmfor AIDS-related diarrhea. The company hopes to begin Phase II/IIItrials this year.
In addition, SunPharm is developing Denspm as a treatment for skindisorders, such as psoriasis, and Dehspm for acute hypertension.
SunPharm licensed the technology for its polyamine analogues fromthe University of Florida in Gainesville. n
-- Charles Craig
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