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REGENERON's $ 48 MIL. INITIAL PUBLIC OFFERING WOULD MATCH AMGEN FUNDING

Executive Summary

REGENERON's $ 48 MIL. INITIAL PUBLIC OFFERING WOULD MATCH AMGEN FUNDING of up to $ 53 mil. for the three-year-old neurobiology start-up's neurotrophic drug R&D activities, the firm disclosed in a Feb. 20 Securities & Exchange Commission "red herring" filing. With the proposed offering, Regeneron Pharmaceutical is seeking to double the potential $ 53 mil. cash infusion from Amgen under a multi-year collaborative agreement announced in September ("The Pink Sheet" Sept. 10, T&G-10). Initially, Amgen's contribution was estimated at $ 26 mil. Amgen's investment as of December 1990 was $ 18.5 mil., comprised of $ 2.5 mil. in product development funding, $ 1 mil. in research progress payments and $ 15 mil. for a 7.3% equity stake in the company. The total could reach $ 53 mil. over a five- year period: $ 5 mil. per year for R&D funding and $ 13 mil. in research milestone payments. Amgen and Regeneron will jointly conduct preclinical and clinical studies of Brain-Derived Neurotrophic Factor (BDNF), Neurotrophin-3 (NT-3) and Ciliary Neurotrophic Factor (CNTF). Regeneron said that other firms that have filed patents for NT-3 and CNTF include Takeda Chemical, Synergen/Syntex and the University of California. The most likely applications for initial clinical trials include Parkinson's disease; motor neuron diseases (including amyotrophic lateral sclerosis or Lou Gehrig's disease); certain peripheral neuropathies; trauma to peripheral nerves; and retinal degeneration due to glaucoma, the filing states. Alzheimer's disease, traumatic brain injury and spinal cord injury are more likely candidates for the second phase of clinicals, due to the difficulty of quantifying efficacy, Regeneron said. Regeneron is planning to offer three mil. shares of common stock with an assumed initial public offering price of $ 17.50 per share. Estimated net proceeds of $ 48 mil. from a successful offering would fund operations into 1994, Regeneron said. In addition to funding R&D, the proceeds may be used for the establishment of manufacturing facilities and a sales and marketing force. The Tarrytown, N.Y.-based firm currently employs 91 full-time employees, 84 of whom are directly involved in research and development, and has 36,000 square feet of office and lab space.

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