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Xoma Sets Price for Public Offering

The price means that the company expects to receive $67.7 million in net proceeds, well below the $79 million it hoped to receive.

Xoma

(XOMA) - Get XOMA Corporation Report

on Friday set the price for its previously announced public offering of 9 million shares.

The offering price, at $8 a share, means that Xoma expects to receive $67.7 million in net proceeds, well below the $79 million the Berekely, Calif.-based biotechnology company said it hoped to receive when it announced the stock offering on Sept. 11.

And even if Xoma's underwriters issue another 1.35 million shares due to high demand for the shares, Xoma won't meet the $79 million goal it set for general corporate purposes, research and development financing, and the payment of debt related to alliances with two other biotech companies.

Xoma originally said full exercise of this 1.35 million share overallotment plus the 9 million shares could push the net proceeds to $91 million.

When Xoma announced its stock offering plans on Sept. 11, the company cited a closing price of $9.40 a share on Sept. 8, the day before a Food and Drug Administration advisory panel reviewed its application for Raptiva, a treatment for psoriasis. Xoma's stock was halted the next day as the panel deliberated, eventually approving the drug by an 11-0 vote. (The FDA, which isn't bound by advisory committee opinions but usually follows them, is expected to rule on the drug by Oct. 27.)

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On Sept. 10, when trading resumed, Xoma's stock leaped to $10.70 and then started fading. The stock closed Friday at $8.31 a share, down 3.4%, or 29 cents.

Xoma, which had 72 million outstanding common shares as of June 30, has said it might use the proceeds to pay some or all of the $74.9 million owed to

Genentech

(DNA)

, its partner in developing Raptiva. The money also might be used to pay off all or some of the $5.2 million owed to

Millennium Pharmaceuticals

(MLNM)

, its partner in developing other drugs.