Vestar Inc., which develops drugs to treat patients with cancerand serious infections, on Tuesday filed for a public offering of2.5 million shares of common stock.

Vestar shares (NASDAQ:VSTR) closed down 75 cents at $16.75on Tuesday.

Vestar's AmBisome liposomal formulation of the anti-fungalamphotericin B is sold in the United Kingdom, Ireland andMexico. Fujisawa USA Inc. is developing AmBisome in theUnited States.

Earlier this month, the San Dimas, Calif., company reportedpromising data from Phase I/II trials of its second drug,DaunoXome, a liposomal form of the cancer drug daunorubicin.The drug is being tested in AIDS patients with Kaposi'ssarcoma.

Vestar raised $15 million in April in a secondary offering of 2million shares at $7.50.

If this offering is completed, Vestar will have 13.4 millionshares outstanding. Underwriter Alex. Brown & Sons Inc. has a375,000-share overallotment option.

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