By Mary Welch

Connetics Corp. registered for a public offering of 4 million shares of common stock that, if sold at current prices, would raise about $20 million.

Connetics stock (NASDAQ:CNCT) closed Wednesday at $5 per share, down 50 cents per share.

"The final price has not been set," said John Higgins, Connetics' chief financial officer. "The SEC has several weeks to review the filing and then we'll do a road show and sell the financing. The actual pricing will probably not be set for another five to eight weeks. If the price were where it was a few weeks ago - at $7.50 - we'd raise close to $30 million; at today's price, it'd be a little over $20 million."

Following the offering, the Palo Alto, Calif.-based company will have 25.6 million shares outstanding. However, if the underwriters exercise their 15 percent overallotment option, the company would have another 600,000 shares - or 26.2 million shares outstanding.

Warburg Dillion Read LLC, of New York, Hambrecht & Quist LLC, of San Francisco, and Raymond James & Associates, of New York, are underwriting the offering.

The company said it will use the funds to expand its commercial organization for its dermatology products. Connetics also plans to broaden its pipeline, possibly through product licensing or acquiring a late-stage product and taking it through the final clinical trials, regulatory licensing and launch.

"We are a sales and marketing company with one product on the market [Luxiq] and another one [Olux] under consideration with the FDA," Higgins said. "We have to look to increase our dermatological product portfolio and broaden our relaxin development."

Luxiq (betamethasone valerate) Foam 0.12 percent is a foam formulation indicated for the relief of moderate psoriasis. It was approved earlier this year and the company expects it to have between $10 million to $17 million in sales next year. Last month Connetics filed a new drug application (NDA) for Olux (clobetasol propionate) Foam 0.05 percent for the treatment of moderate to severe scalp dermatoses. (See BioWorld Today, March 3, 1999, p. 1; and July 30, 1999 p. 1.)

Relaxin (ConXn) is a natural protein that has demonstrated an ability to inhibit excessive connective tissue buildup by decreasing collagen production and enhancing collagen breakdown. The company has entered into three agreements for the development, commercialization and supply of relaxin, and potentially could receive more than $55 million in license, development and milestone payments.

In February, Connetics started a Phase II/III trial of relaxin involving 200 patients for the treatment of scleroderma. The study should be completed next year.

The company expects to enter Phase I/II trials with relaxin for infertility in the fall, Higgins said. Another possible indication is for the treatment of organ fibrosis.

Earlier this month, it licensed worldwide rights for a third dermatology product, ketoconazole foam, a quick-break foam formulation of the antifungal drug ketoconazole.

"There's just a lot on our plate," Higgins said. "We've had a string of significant events and we want to keep them coming."