Contributing Writer

Trubion Pharmaceuticals Inc. plunged into the public market Wednesday, raising $52 million in an initial public offering of 4 million shares priced at $13 apiece.

At the same time, Trubion's partner Wyeth Pharmaceuticals agreed to buy 800,000 shares at the IPO price through a private placement. An additional 600,000 shares are available to cover overallotments that, combined with the Wyeth deal, could bump up Trubion's take to about $64 million after expenses.

In its first day of trading, Trubion's stock (NASDAQ:TRBN) rose as high as $13.30 before closing at $13.09 on volume of more than 1 million shares.

The deal came in at the low-end of Seattle-based Trubion's estimated $13 to $15 price range, yet still managed to top this year's average: The 19 biotech IPOs priced by the end of the third quarter have an average take of $45.7 million, according to BioWorld Industry Snapshots. Like Trubion, many of those had hoped to raise more, according to SEC filings, and there are still 16 firms on file for an IPO. (See BioWorld Today, June 8, 2006.)

Trubion executives did not return calls seeking comment, but the company's prospectus stated that proceeds from the financings will be used for "general corporate purposes," which will include about $39.7 million allocated to the pipeline, $15.3 million going to infrastructure and $6.1 million set aside for working capital and general use. Additional proceeds may be used to pay off a loan or finance acquisitions.

With two years worth of cash on hand, Trubion is free to focus its attention on ongoing clinical trials with lead product candidate, TRU-015. Enrollment in a Phase IIa rheumatoid arthritis trial with the CD20-targeted compound wrapped up in February, and Trubion kicked off a Phase IIb in September to evaluate a larger dose range. In a Phase I study, the drug induced a dose-dependent response in both the degree and duration of B-cell depletion, the company reported.

TRU-015 also is being evaluated in preclinical studies for systemic lupus erythematosus (SLE) and might be applicable in other indications. Its potential caught Wyeth's eye, resulting in a partnership, potentially worth $840 million, earlier this year. (See BioWorld Today, Jan. 4, 2006).

Also in Trubion's pipeline is TRU-016, which the company hopes to file an investigational new drug application for in the second half of 2007. The CD37-targeted compound is in preclinical evaluation for non-Hodgkin's lymphoma and chronic lymphocytic lymphoma.

Both TRU-015 and TRU-016 derive from Trubion's technology platform, SMIP (Small Modular Immunopharmaceuticals). That new class of molecules is designed to address the size limitations of antibodies that can impede their ability to effectively penetrate tissues. SMIPs are single-chain polypeptides that are about one-half the size of therapeutic monoclonal antibodies and bind to specific cell-surface antigen targets. Trubion claims they allow better tissue penetration as well as safety and efficacy benefits.

The modular design of the SMIP products allows Trubion to assemble custom drug candidates. TRU-015 was churned out in less than 24 months from design to IND filing, and the company estimated it would be able to produce a steady stream of similar candidates.

To support its growing pipeline, Trubion plans to increase its number of employees from 72 as of Sept. 30 to about 85 by the year's end.

Following the IPO, the company had 16.9 million shares outstanding, which reflects about a 6.3-to-1 reverse stock split completed this month. Morgan Stanley & Co. Inc. acted as sole book-running manager in the offering and shared lead manager responsibilities with Banc of America Securities LLC. Pacific Growth Equities LLC and Lazard Capital Markets served as co-managers.

Primary venture investors in Trubion, each of whom will hold more than 10 percent of the company following the IPO, include ARCH Venture Partners, Frazier Healthcare Ventures, Oxford Bioscience Partners, Prospect Venture Partners II LP and Venrock Associates.