Associate

Neurochem Inc. filed for an initial public offering in the U.S., and at the same time will offer a new issue of shares in Canada, where it is publicly traded on the Toronto Stock Exchange.

It said it plans to use the proceeds to fund clinical trials and complete preclinical and research and development programs. It also said it would use proceeds for capital expenditures, working capital and general corporate purposes. It said the offering is planned mainly for the U.S.

In its prospectus filed with the SEC, the Montreal-based company said it plans to offer 4.2 million shares. Based on the company's Aug. 18 close of C$14.48, or US$10.41, the sale would raise about US$43.7 million. It has applied to have its stock traded on Nasdaq under the symbol "NRMX." Underwriters would have a 30-day option on up to 630,000 shares at the public offering price to cover overallotments. After the offering, Neurochem expects to have about 27.8 million shares outstanding.

The company's stock (TSE:NRM) fell C54 cents Wednesday to close at C$13.30.

The company focuses on therapeutics for neurological disorders. It in-licenses early stage products to manage their clinical development and commercialization. Its candidates are small molecules designed to bind to amyloid proteins.

Its lead product is Fibrillex, which is in a Phase II/III trial in amyloid A amyloidosis, a systemic disorder. Next it has Alzhemed, a drug for Alzheimer's disease. Phase II trials are complete and Phase III trials are being designed.

Cerebril, designed to treat hemorrhagic stroke due to cerebral amyloid angiopathy, is in a Phase II trial. The company also is conducting preclinical work on NC-1461, a compound for the treatment of epileptic seizures induced by traumatic brain injury.

For the quarter ended June 30, the company posted a net loss of C$3.5 million, or C15 cents per share. For the 12 months ended June 30, it lost C$19.6 million. It had cash, cash equivalents and marketable securities of C$16.3 million at the end of the second quarter. Near the end of 2002, it raised C$8 million in a private placement that also included a sale of warrants. If exercised, the warrants would raise about another C$9.5 million. (See BioWorld Today, Dec. 13, 2002.)

UBS Securities LLC, of New York, is acting as the sole book-running underwriter. Co-managers are Banc of America Securities Canada Co., of New York; RBC Dominion Securities Inc., of Toronto; CIBC World Markets Corp., of New York; Loewen, Ondaatje, McCutcheon Ltd., of Toronto; and Orion Securities Inc., of Toronto.