Telios Pharmaceuticals Inc. on Thursday said it raised $20million in a scaled-down initial public offering of 2.5 millionshares of common stock at $8 per share.

Telios had proposed selling 3 million shares at $10 to $12 pershare. The shares (NASDAQ:TLIO) closed at $8.

The San Diego company is developing drugs based on the roleof the extracellular matrix, a meshwork of proteins and othercompounds that surrounds most cells.

OcuNex, an adhesion peptide-based drug, is in Phase II trials totreat corneal damage caused by dry eye. TelioDerm, anotheradhesion peptide, is in multicenter studies for chronic dermalulcers.

After the offering, Telios has 19.2 million shares outstanding.Of the shares offered, 2 million were sold in the United Statesand Canada by underwriters Morgan Stanley & Co. Inc. andHambrecht & Quist Inc. The remaining shares were offeredoutside of the U.S. and Canada by Morgan Stanley International,H&Q and Deutsche Bank Aktiengesellschaft. The underwritershave a 375,000-share overallotment option. -- KB

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