DynaGen Inc. announced on Wednesday that ithas completed its public offering, selling 1.6million units at $4.50 each. The final offering,which raised gross proceeds of $7.2 million,represents the company's third attempt to raisemoney in this round of financing.When it initially announced its public offering lastNovember, DynaGen planned to raiseapproximately $20 million through the placementof 2 million preferred shares at $10 per share.Each preferred share was to have been worthtwo common shares and to have carrieddividends payable quarterly at a rate of 9 percentper share per year.In February, the Cambridge, Mass., companyamended its offering, deciding instead to offer1.35 million units, each unit consisting of threeshares of common stock at warrants to purchasetwo further shares. In the intervening month,DynaGen president and chief executive officerIndu Muni told BioWorld, a drop in the value ofits stock convinced the company that it wouldhave to increase both the number of units soldand the number of shares in each unit. The 1.6million units finally sold by the companyconsisted of four common shares and warrantsto purchase a further two common shares. Eachwarrant is exercisable for a period of five yearsat a price of $1.20 per common share redeemed.Presuming all warrants are eventually exercised,DynaGen will add 9.6 million shares to its 14.4million currently outstanding. The companyexpects net proceeds of about $5.8 million fromthe placement, Muni noted.Cash Needs IncreasingDynaGen's cash needs have been increasing asit adjusted its offering. As of Sept. 30, 1993,company chairman and executive vice presidentJay Wadekar reported that the company hadabout $4 million cash on hand. Wadekar alsosaid that clinical trials of DynaGen's NicErasesmoking-cessation drug would likely bring thecompany's burn rate to $1 million per month.In late February, however, Muni said that thecompany had about $2 million cash on hand;that figure had changed very little as of thecompletion of the offering, he told BioWorld.Muni explained that the company was holding offon its clinical development program, awaiting aplacement that would give it cash to continue itstrials. The offering was managed by RASSecurities Corp. and Thomas James AssociatesInc.An intramuscular injection formulation ofNicErase-IA is currently in its second Phase IIItrial, Muni noted. NicErase-SL, a sublingualformulation of the agent, is in a Phase II trial andshould enter Phase III in May, he added.DynaGen's stock (NASDAQ:DYGN) closed at$0.97 per share on Wednesday, down 9 cents.031794 DynaGen

-- Karl A. Thiel Business Editor

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