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Executive Summary

SOMATOGEN's rHb1.1 INITIAL PHASE I RESULTS SHOW "NO SERIOUS ADVERSE EVENTS," the company said in a June 29 filing with the Securities and Exchange Commission. The Phase I protocol began in February and early results have been reported to FDA, Somatogen said. Healthy subjects treated with the initial dose levels of the blood substitute experienced only "transitory mild to moderate symptoms that were managed with ibuprofen," Somatogen said. FDA has authorized Somatogen to proceed to the second stage of Phase I, according to the prospectus, which will involve administration of progressively larger amounts of rHb1.1 "up to a clinically relevant dose of approximately 25 grams." Those trials are expected to get under way in "late summer." The recombinant hemoglobin product, the most advanced in Somatogen's pipeline, is designed to replace blood lost in surgery. A PLA for rHb1.1 is at least three years away, the firm notes. The prospectus registers 2.3 mil. shares for sale in a secondary offering which could net the firm close to $54 mil. Somatogen raised $38 mil. from its initial public offering last year ("The Pink Sheet" July 1, 1991, T&G-8). The stock currently is trading around $29 a share. In its July 1991 IPO prospectus, Somatogen said it would allot about a third of net proceeds to manufacturing facilities. That continues to be a high priority -- if the secondary offering is successful, the bulk of proceeds will also go to expand production capacity. Somatogen is designating $36 mil. of expected proceeds to design and build a new clinical manufacturing facility. Another $5 mil is earmarked for a commercial manufacturing facility, and $4 mil. for upgrades to Somatogen's existing facilities. The company currently produces rHb1.1 at a pilot production facility, which is expected to have sufficient capacity to meet Somatogen's needs for Phase I, Phase II and part of Phase III. Construction of the planned clinical facility is slated to begin this autumn, according to the prospectus. The facility will expand manufacturing capacity for domestic and international clinical trials, as well as initial commercialization. Boulder, Colo.-based Somatogen expects to begin building the commercial facility in the second half of calendar 1993. As of March, the company had $4 mil. on hand in cash and cash equivalents, and $33.4 mil. in short-term investments. Current liabilities were $4.1 mil. Net loss for the nine months was $5.9 mil. Alex. Brown and Montgomery Securities are underwriting the offering.

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