Somatogen Inc. has restructured its midsummer public offeringfrom one consisting of preferred stock to one consisting ofcommon stock -- and an additional offshore private placement.

Somatogen (NASDAQ:SMTG) of Boulder, Colo., filed an S3registration statement with the Securities and ExchangeCommission on July 27 for $40 million in convertible,exchangeable preferred stock, to be underwritten by LehmanBrothers and Montgomery Securities.

But on Monday, the company announced that it had filed anamendment to that S3 registration, indicating that the companynow intends to seek buyers for 3 million shares of commonstock. Somatogen has also dispensed with the underwriters andis "doing the deal directly," according to Nanita Woolhiser, thecompany's administrator of investor relations. However, it hasretained Montgomery Securities and Stover Haley Burns Inc. as"finders," she told BioWorld.

Simultaneously, Somatogen is offering 2 million shares in aRegulation S (offshore) private placement through LehmanBrothers, Woolhiser added. These shares will be sold at adiscount to the price of the publicly traded stock.

After the public offering of 3 million shares, Somatogen willhave about 13.3 million shares outstanding, said Woolhiser.

According to Somatogen's first-quarter financial results, as ofSept. 30, the company had cash, cash equivalents and short-term investments of $13.6 million, and was burning close to$5.6 million per quarter.

Somatogen's stock lost $1.50 a share on Monday, closing at$10.25. -- Jennifer Van Brunt

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