Regeneron Pharmaceuticals Inc., a 3-year-old company with noproducts in clinical trials, on Tuesday completed an initialpublic offering that grossed $99 million.

It ranks as the second-largest biotech IPO ever, according to aninformal survey of industry analysts. Only Cetus Corp.'s $120million IPO in 1981 has raised more.

Regeneron sold 4.5 million shares of common stock priced at$22 per share, a significantly larger offering than the companyannounced in February. At that time, Regeneron estimated thatthe IPO would be for 3 million shares priced between $16 and$19.

The stock (NASDAQ:REGN) climbed to $23.25 during its first dayof trading on Tuesday before falling back to close at $21.13.

Industry watchers have already begun putting up warningflags about the high prices of IPOs. "IPOs priced like thiseventually get deflated and come down and crush theinvestors," said Richard Bock, senior vice president ofinvestments at Sutro & Co. in Los Angeles. "There's nojustification for this price level other than underwriters' greedand investors' ignorance."

Following the offering, Regeneron has 15.5 million shares ofcommon stock outstanding, giving it a market capitalization of$340 million, a figure some analysts find excessive.

"I don't see how you can support that kind of capitalization thatearly," said Jim McCamant, editor of the Medical TechnologyStock Letter in Berkeley, Calif. Regeneron is at least a yearaway, and probably two or three years, from putting a productinto clinical trials, McCamant said.

Regeneron is pursuing treatments for neurodegenerativediseases, including Parkinson's, Alzheimer's and amyotrophiclateral sclerosis, and for peripheral neuropathies. It isdeveloping three neurotrophic factors: brain-derivedneurotrophic factor (BDNF), neurotrophin-3 (NT-3) and ciliaryneurotrophic factor (CNTF).

The company also has an agreement with Amgen Inc. to jointlydevelop BDNF and NT-3.

Cephalon Inc., which also is developing treatments forneurodegenerative diseases, last month said it was filing an IPOtentatively priced between $17 and $19 per share. Those priceswould give it a market capitalization between $129 million and$144 million.

At such prices, "Cephalon is a steal," said Brandon Fradd, abiotech analyst at Montgomery Securities in San Francisco.Cephalon may even have some products that access the blood-brain barrier better, Fradd said.

Fradd compared Regeneron's market capitalization with that ofother companies, such as ImmunoGen Inc. and CaliforniaBiotechnology Inc., which recently completed secondaryofferings. Both companies have three products in clinical trials.Cal Bio completed its offering at $14.66 per share, giving it amarket cap of $208 million. ImmunoGen's $19 per shareoffering gave it a market cap of $154 million.

Spokesmen at Regeneron's headquarters in Tarrytown, N.Y.,said they could not comment because the company technicallystill was in registration.

-- Karen Bernstein BioWorld Staff

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