Argus Pharmaceuticals Inc. completed a 1.7 million-shareinitial public offering that should net the company about $10.8million.

The Houston-based company sold the shares Friday at $7 each.At the company's closing stock (NASDAQ:ARGS) price of $7.25 ashare on Monday, Argus has an indicated market value of$48.4 million.

Argus is pursuing therapeutics based on its own research andtechnology licensed from the M.D. Anderson Cancer Centerconcerning macrophages, a key disease-fighting cell of theblood and immune system.

The company's lead anti-infective compound, AR-121, is anintravenous and less toxic version of the existing topical anti-fungal, nystatin. AR-121 is in Phase I/II clinical trials fortreating HIV infection. Argus said it intends to file aninvestigational new drug (IND) application on AR-121 late thisyear for treating systemic fungal infections, according to its IPOprospectus.

Three other products are in preclinical development, includingits most advanced anti-cancer agent, AR-623, an intravenousversion of the existing oral drug tretinoin. The companyexpects to file an IND for AR-623 for treating leukemia late thisyear.

According to its prospectus, Argus posted a 1991 loss of $2.9million on $144,297 of revenues. Research and developmentcosts ran $1.9 million for the year.

According to the prospectus, Argus' largest shareholder isAllstate Insurance Co. of Northbrook, Ill., which owns about 23percent of Argus following the IPO and including 286,000additional shares Allstate is expected to buy.

Other top shareholders, reflecting expected stock purchases,include The Woodlands Venture Fund L.P. of The Woodlands,Texas, with an 11 percent post-IPO stake, and Essex VenturePartners L.P.s I and II of Chicago, with nearly 11 percentownership.

(c) 1997 American Health Consultants. All rights reserved.

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