MGI Pharma Inc. netted $146.6 million after selling more shares at a higher-than-projected price in a previously reported public offering.

The Minneapolis-based company sold 4.4 million common shares at $35.50 each for gross proceeds of $156.2 million, two weeks after detailing plans to sell 4 million shares on a day its stock opened at $31.97. The stock (NASDAQ:MOGN) had surged 20 percent the prior trading day after the FDA approved Aloxi (palonosetron hydrochloride), a therapy for chemotherapy-induced nausea and vomiting. (See BioWorld Today, July 29, 2003.)

Since that time, the stock has continued to climb, and on Friday MGI's shares gained 7 cents to close at $36.85.

"There was good demand for the offering," Jennifer Davis, MGI's senior manager of investor relations, told BioWorld Today. "We're happy that things came together the way they did."

The funding essentially quadruples the company's cash and marketable securities reserves, which totaled $48.7 million as of June 30. MGI also reported about 25.4 million shares outstanding at the time, the close of its most recent fiscal quarter, during which it also reported a $7 million net loss.

A group of New York-based underwriters are handling the offering. Merrill Lynch & Co. is the leader, with co-management from U.S. Bancorp Piper Jaffray, Lazard Freres & Co. LLC and C.E. Unterberg, Towbin.

If they exercise a 30-day, 660,000-share overallotment option, MGI would add gross proceeds of about $23.4 million. The company offered all the shares in the sale, which stemmed from a shelf registration statement filed in June to sell up to $150 million of securities.

"We will primarily use the funds to acquire new oncology products," Davis said. "That's a part of our business model - to acquire new products and either market or develop them, depending on their stage. And we'll use the money for other general corporate purposes beyond that."

That catch-all umbrella includes marketing efforts for Aloxi, which Davis said the company plans to launch around the middle of next month. Though she declined to provide more specific guidance relative to launch activities, MGI said during the last quarter it hired an additional 30 sales employees to task the drug for its oncology sales force.

The company has projected Aloxi's sales to generate $40 million to $55 million in its first year on the market, eventually topping out at $250 million in annual sales four years after its launch.

The 5-HT3 receptor antagonist, which is partnered with Helsinn Healthcare SA, was approved to prevent acute nausea and vomiting in patients receiving first and repeat courses of moderately and highly emetogenic chemotherapy, and to prevent delayed sickness in patients receiving first and repeat courses of moderately emetogenic chemotherapy.

MGI paid about $38 million for U.S. and Canadian marketing rights to Aloxi, whose development was fully funded by its Lugano, Switzerland-based partner. Upon submitting the new drug application late last year, Helsinn reported Phase III data pointing to the drug's effectiveness through a single intravenous dose. The privately held company will receive about one-third of MGI's sales revenue for royalties and supply costs. (See BioWorld Today, Dec. 3, 2002.)

Beyond Aloxi, MGI features two additional clinical cancer therapies deeper in its pipeline.

An anti-tumor chemotherapeutic agent, irofulven (hydroxymethylacylfulvene), is being tested as monotherapy and combination therapy in a Phase I/II program for refractory or recurrent advanced epithelial ovarian cancer, hormone-refractory prostate cancer, recurrent malignant glioma and inoperable liver cancer.

The other compound, MG98, is an antisense product in a dose-finding Phase I program in myelodysplasia and acute myeloid leukemia.