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Executive Summary

ADVANCED MAGNETICS 1992 NDA FILING FOR FERIDEX MRI CONTRAST AGENT is forecast in the company's final prospectus for a secondary public offering that closed Feb. 12. Feridex is a liver contrast agent for use with magnetic resonance imaging. A total of 55 patients have received Feridex in Phase II/III trials. Seven centers are currently enrolling patients, the prospectus says, and the trial "will ultimately involve 11 clinical sites." The company "expects to file an NDA in late 1992." Advanced Magnetics began clinical trials of Feridex in August 1987 and was projecting an NDA filing as early as 1989. The trials were put on hold by FDA in September 1988 due to questions about safety. FDA approved resumption of the trials in March 1990, but the company elected to reformulate the product, the prospectus explains. A total of 301 patients have received the new formulation of Feridex, the prospectus notes. Feridex is taken up by normal liver tissue but not by tumors, Advanced Magnetics said, "dramatically enhancing the contrast between them." The company believes that Feridex "will allow magnetic resonance images of liver tumors that are smaller than those generally identified with [computerized tomography] scanning," which is the current standard imaging technique. Approximately 1.5 mil. liver scans were performed in 1990 using non-MRI techniques. However, "the company believes that if an effective MRI contrast agent were available, a substantial number of these scans would instead use MRI or would use MRI in addition to other imaging techniques." Advanced Magnetics also projects a 1992 NDA filing for another MRI imaging agent, AMI-121 for gastrointestinal imaging. As of Nov. 20, "approximately 295 patients in the U.S. and Europe had received [AMI-121], with only transitory adverse reactions such as diarrhea and nausea," the prospectus says. AMI-121 is licensed to Mallinckrodt in the U.S. ("The Pink Sheet" July 16, T&G-6). A third MRI imaging agent, AMI-227 for lymphatic system imaging, will soon be in the clinic. Advanced Magnetics' partner for the product, Squibb Diagnostics, filed an IND for AMI-227 on Feb. 4. Squibb also expects to file an IND for a second generation liver imaging agent, AMI-HS, in 1992, the prospectus states. Squibb licensed AMI-227 and AMI-HS in February 1991 ("The Pink Sheet" Feb. 11, 1991, T&G-9). All of Advanced Magnetics' contrast agents are based on its proprietary "colloidal super-paramagnetic particle technology." The company believes its iron oxide particles "are more magnetic than the paramagnetic chelates of gadolinium or manganese that are employed in contrast agents under development or being sold by other companies." To date only one MRI imaging agent has been approved by FDA: Berlex' Magnevist. Two other agents, Squibb's Prohance and Sterling Winthrop's Omniscan, recently cleared an FDA advisory committee ("The Pink Sheet" Nov. 11, p. 9). Advanced Magnetics also has research programs in in vitro diagnostics and drug delivery/cell separation. In the latter program, the company is exploring the use of arabinogalactan, a plant-derived polysaccharide approved as a food additive, for use as a drug delivery vehicle targeting the liver. The company also hopes to use its superparamagnetic particles for such cell separation processes as bone marrow purification. The Feb. 12 offering of 1.75 mil. shares was priced at $24.375 per share. Advanced Magnetics offered 1.06 mil. of the shares, with ML Technology Ventures offering all of its 562,500 share (9.95%) stake in the company. Founder and Chairman Jerome Goldstein, cofounder Marlene Goldstein, director Leslie Goldstein and Senior VP-Research Lee Josephson, PhD, offered the balance. Proceeds to the company, assuming full exercise of overallotments, will exceed $30 mil. Advanced Magnetics will use the money to fund its development work and may explore possible acquisitions.

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