Genelabs Technologies Inc. has filed for the registration of 4million new shares with the Securities and ExchangeCommission in connection with a public offering.
At the Redwood City, Calif., company's current trading price of$3.13 per share, Genelabs is hoping for gross proceeds of $12.5million. The offering is being managed by Kemper SecuritiesInc. and is expected to be completed in April or May.
The company (NASDAQ:GNLB) finished 1993 with about $14million in cash on hand and a net burn rate of slightly morethan $1 million per month, Genelabs' president and chiefexecutive officer, Frank Kung, told BioWorld. The company'sdiagnostic business in Singapore, he said, brought in revenuesof $9.6 million last year.
The 4 million new shares will be added to the 21.5 millionshares the company currently has outstanding. The follow-onoffering is Genelabs' first financing since its 1991 initial publicoffering, Kung said, when the company raised net proceeds ofabout $24 million through the sale of 2.8 million shares at$9.13 each.
Proceeds will go toward clinical development of severalproducts, including DHEA, a lupus therapeutic that Genelabslicensed from Stanford University. The company submitted aninvestigational new drug application (IND) at the end of lastyear for DHEA and hopes to soon begin a Phase II/III trial ofthe agent (Stanford has already conducted Phase II clinicaltrials).
Genelabs also will use the funds to develop its hepatitis E andhepatitis X vaccines, both currently in preclinical development.
Hepatitis is an inflammation of the liver that can be causedeither chemically (from pesticides or alcoholism, for example)or through viral infection. The viral form of the disease, Kungexplained, is broadly divided into two categories: viruses thatare transmitted through blood or bodily fluids, and virusestransmitted through water. Hepatitis B and C are caused by ablood-borne virus, for example, while hepatitis A and E can becontracted by drinking infected water. (Hepatitis D is a form ofthe illness contracted only by people who have previously hadhepatitis B).
There is at least one unknown blood-borne virus that alsocauses hepatitis, Kung continued, and the resulting illness iscurrently called hepatitis X. While many cases of this disease ordiseases have been recorded, he said, the prevalence ofhepatitis X is not known. Hepatitis E, on the other hand, is atleast as common as hepatitis A, according to epidemiologicaldata gathered by the company through the use of its hepatitis Ediagnostic kit (currently marketed in Asia by the company andsold in Europe by Abbott Laboratories).
According to Kung, 1 to 2 percent of the U.S. population suffersfrom hepatitis E. In Africa, prevalence is 7 to 9 percent, whilethe rate of illness runs as high as 14 percent in Thailand andup to 20 to 30 percent in parts of China.
Genelabs has begun studying hepatitis E vaccine candidates inlarge monkeys and hopes to file an IND in the first quarter of1995, Kung said. The company is still in discovery concerninghepatitis X, trying to identify the virus that causes the illness.
Genelabs' stock closed at $3.13 per share on Wednesday, down13 cents.
-- Karl A. Thiel Business Editor
(c) 1997 American Health Consultants. All rights reserved.