Telios Pharmaceuticals Inc. said that it has filed for an initialpublic offering of 3 million shares of common stock with aproposed price of $10 to $12 per share.

Telios was founded in 1987 to develop 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. The drug stimulatesthe attachment and growth of epithelial cells in damaged areasof the eye's surface. TelioDerm, another adhesion peptide, is inmulticenter studies for chronic dermal ulcers.

The San Diego company has corporate partnerships with OnoPharmaceutical Co. Ltd. and Genentech Inc. (NYSE:GNE). Ono,which owns 10 percent of Telios before the offering, isfinancing development of inhibitors of transforming growthfactor-beta and is conducting trials of OcuNex in Japan.

In January 1991, Telios signed a $15 million collaborationagreement with Genentech to develop an anti-coagulant basedon short peptides to block the aggregation of platelets.

Of the shares offered, 2.4 million will be offered in the UnitedStates and Canada by underwriters Morgan Stanley & Co. Inc.and Hambrecht & Quist Inc., and 600,000 shares will be offeredinternationally by Morgan Stanley International, Hambrecht &Quist and Deutsche Bank Aktiengesellschaft.

If the offering is completed, Telios will have 19.6 million sharesoutstanding. The underwriters have a 450,000-shareoverallotment option. -- KB

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