Staff Writer

With a goal of helping the aging population enjoy life to the fullest, Auxilium Pharmaceuticals Inc. filed for its initial public offering, hoping to raise $86.25 million.

The Norristown, Pa.-based company, which was founded in 1999, focuses on urologic and sexual health disorders of aging men and women. It has one marketed product, Testim, to treat hypogonadism.

Auxilium - a name that means "assistance" in Latin - plans to list its stock on the Nasdaq National Market under the ticker symbol "AUXL."

New York-based Deutsche Banc Securities Inc. would serve as lead underwriter, with U.S. Bancorp Piper Jaffray, of Minneapolis, and Thomas Weisel Partners LLC, of San Francisco, acting as co-managing underwriters.

The company declined to comment due to SEC-imposed quiet-period rules. The company has not yet specified the number of shares to be offered or the price range. However, it did say that it plans to use 30 percent of net proceeds to expand the Testim market by increasing its sales capabilities and by conducting additional clinical trials. Another 40 percent of the proceeds would go toward acquiring or in-licensing additional product candidates or approved products. The remaining 30 percent would be used for working capital and other general corporate purposes.

Testim, the company's only marketed product, is a topical 1 percent testosterone gel indicated to treat hypogonadism - a disorder that affects 20 percent of U.S. males older than the age of 50.

The company uses its own 97-person sales force to market Testim, which was launched in the first quarter of 2003. The pharmaceutical market research firm IMS Health Inc. said Testim had an 8.9 percent share of monthly total testosterone gel prescriptions in March. The total monthly Testim prescription units dispensed have grown from about 1,000 in March of last year, to more than 15,500 in March of this year.

Earlier this month, Auxilium entered a license and distribution agreement with Paris-based Ipsen SA to market Testim in all countries except the U.S., Canada, Mexico and Japan. Bayer Inc., a division of Leverkusen, Germany-based Bayer AG, gained the Canadian marketing rights in February. Auxilium plans to file for approval in Canada this year. It received approval in the UK in 2003 and has applied for regulatory approval in other European countries through the mutual recognition procedure.

Men with hypogonadism exhibit lower than normal levels of testosterone, resulting in low energy levels, loss of sex drive, decreased muscle mass and mild depression. The market has grown more than 20 percent for each of the previous three years, IMS said, and Auxilium believes the market will continue to grow.

Testim is one of two marketed testosterone gels. Other testosterone-replacement products include pills, injections, transdermal patches and a buccal tablet. Testosterone gels have grown to 61 percent of the total testosterone prescriptions filled in 2003, Auxilium said. The company believes that is because gels are easy to use and offer reduced side effects.

In its clinical program, Auxilium conducted 11 studies of Testim in more than 1,400 patients. Data showed that Testim produced 30 percent higher total testosterone absorption and 47 percent higher free testosterone absorption, compared to another commercial gel. It also brought significantly more men with low testosterone to normalized levels than a transdermal patch. The clinical development program was executed over a 12-month period, and Auxilium received FDA approval for Testim 10 months after filing.

Aside from Testim, the company has an additional product to treat hypogonadism and a treatment for overactive bladder in its pipeline.

The company also is working to develop delivery systems for androgen-replacement therapy and for use in treating erectile dysfunction and urinary incontinence.

The company has about 150 employees. Since inception, it has raised $97 million from investors. It raised $43 million in a Series D financing last November.

As of Dec. 31, Auxilium reported cash and cash equivalents of $28.4 million.