Staff Writer

A day after tapping private investors for a year's worth of cash, CancerVax Corp. is looking for more - and this time from the public sector.

The Carlsbad, Calif.-based company filed for a $115 million initial public offering, the third biotech IPO filed in the past few weeks. CancerVax, which applied for listing on the Nasdaq exchange under the symbol "CNVX," is selling an unspecified number of shares at an unspecified price, according to its prospectus filed with the SEC.

New York-based Lehman Bothers Inc. is the offering's lead underwriter, with additional work from Thomas Weisel Partners LLC, of San Francisco, and U.S. Bancorp Piper Jaffray Inc., of New York.

CancerVax's primary investor is Donald Morton, its founder and a director who controls a quarter of the company's shares. He also is the medical director and surgeon-in-chief at the John Wayne Cancer Institute in Santa Monica, Calif. President and CEO David Hale has a 4 percent stake in CancerVax.

Large venture capital holders include San Diego-based Forward Ventures, which controls 7 percent, as well as three other funds that have 5 percent stakes each - J.P. Morgan Fleming Asset Management, of New York; WestLB Asset Management, of Chicago; and Vector Fund Management LP, of Chicago.

Upon completing the IPO, CancerVax would convert all its preferred stock into common stock.

The 134-employee company reported a $41.4 million net loss during the 2002 fiscal year ended Dec. 31, along with about $20 million in cash, cash equivalents and securities through June 30. On Wednesday, CancerVax more than tripled its reserves after securing $41 million in a Series C round of financing from a group of undisclosed new and existing investors.

The company has raised $126 million since its first round of venture financing in December 2000. Julie Ames, CancerVax's director of corporate communications, said the latest funding would last at least a year and would be used to continue Phase III trials of its Canvaxin product in skin cancer patients. The company sold 20.5 million shares of Series C preferred stock in the private financing. But she added that the $41 million was insufficient to complete the program. (See BioWorld Today, Aug. 15, 2003.)

Enter the IPO, which CancerVax expects to open a window of financing to fund operations for a longer duration. The company said it would use the proceeds to further the product's development and eventual commercialization activities, including the scale-up of manufacturing operations. It is conducting two randomized, double-blinded, placebo-controlled studies of its lead immunotherapy product. The studies include more than 50 sites worldwide for advanced-stage melanoma, an indication for which the product has received fast-track and orphan drug designations from the FDA.

But the agency halted the trials' enrollment last year over concerns related to Canvaxin's production. Those already enrolled continued treatment, and CancerVax stressed that the hold did not result from any clinical practice or safety concerns.

After about a year later, the studies resumed. At the time, CancerVax said it expected to complete enrollment next year in the 1,120-patient Stage III melanoma trial and the 660-patient Stage IV melanoma trial. The survival trials are expected to end late next year or early in 2005. (See BioWorld Today, April 16, 2003.)

As of Aug. 1, the company said it had enrolled more than 700 patients in the Stage III trial and 290 patients in the Stage IV study.

The product was developed from CancerVax's specific active immunotherapy technology, a platform based on human tumor cell lines that contain arrays of antigens that have been shown to elicit an immune response in patients with certain solid-tumor cancers. The company said Canvaxin contains at least 38 known melanoma- and tumor-associated antigens.

CancerVax eventually plans to market the product on its own in the U.S., while looking to partner its sales and marketing rights in Europe, Asia and elsewhere. It said it expects Canvaxin to be available in 2006.

The company expects to apply proceeds from the IPO elsewhere in its pipeline as well. From its immunotherapy program, CancerVax is developing a research-stage lung cancer product. The company also has an anti-angiogenesis technology platform, which it acquired through its purchase of Los Angeles-based Cell Matrix Inc. last year, as well as preclinical human monoclonal antibodies that target various solid-tumor cancers. (See BioWorld Today, Jan. 10, 2002.)

CancerVax also expects to use the funding to in-license technologies and acquire or invest in complementary businesses, products or technologies.