soar it will

The $12.5 million initial public offering (IPO) of drugs developer HalcyGen Pharmaceuticals Ltd has closed oversubscribed.

HalcyGen plans to use the proceeds raised through the offer of 25 million shares at 50 cents each to help develop "supergenerics" - generic drugs that are modified to make them more effective, safer or easier to use.

HalcyGen wants to develop two anti-infective drugs - an anti-fungal treatment called SUBA-Itraconazole and an antibiotic called Minocycline - which have been licensed from pharmaceuticals group Mayne Pharma International.

The strong interest in the IPO came as no surprise to Halcygen chairman Roger Aston, who said he expected great demand from investors because both drugs were in the later stages of development.

"We were expecting strong interest because we have two drugs in late stage development, an alliance with Mayne, and offered a modest valuation for drugs that will soon undergo Phase III clinical trials," Mr Aston said.

"Demand for shares was particularly strong, and unfortunately a number of applicants received only 10 to 20 per cent of their requested allocations."

HalcyGen will have around 76 million shares on issue after the offer, and a market capitalisation of about $38 million.