West Coast Editor
On the same day that Point Therapeutics Inc. disclosed its decision to pull its proposed stock sale due to market conditions, Accentia Biopharmaceuticals Inc. priced its initial public offering of 2.4 million shares at $8 each to raise $19.2 million - an amount well shy of the $86.2 million sought when the company filed the IPO in February.
Chrystyna Bedrij, analyst with Griffin Securities in New York, said she believes there is generally "plenty of money available" and "we are still seeing excellent investment opportunities," despite a somewhat tight climate.
"[But] many offerings are perhaps being priced too high, causing investors to pass" because the deals don't offer enough discount or warrant coverage, said Bedrij, who covers Boston-based Point.
The Accentia price is at the low end of the $8 to $10 range targeted by the Tampa, Fla.-based company, which first filed for the IPO in May but later reduced the size of the offering from 6.25 million to 2.5 million, and reduced the price range, which had been $11 to $13.
Accentia's stock (NASDAQ:ABPI) closed Friday at $7.25.
After deducting underwriting discounts, commissions and expenses, proceeds are expected to be about $14.1 million or, if the underwriters exercise their 360,000-overallotment option in full, about $16.8 million.
Accentia said in its prospectus that it plans to use about $6.1 million for milestone payments to specialty pharma development partners over the next year, and will need another $4.9 million to fund operating losses and hikes in working capital needs.
About $2.8 million will go toward completing two Phase III trials that will start this year with SinuNase, one of its two lead products. The drug is an amphotericin B suspension administered into the nasal cavity for chronic rhinosinusitis, a long-term inflammatory condition of the paranasal sinuses.
Accentia's other lead product, the patient-specific cancer vaccine Biovaxid, already is in Phase III trials as a therapy for indolent, or low-grade, B-cell follicular non-Hodgkin's lymphoma. The primary endpoint of the trial, which began in 2000, is time to tumor progression between Biovaxid vs. control.
With an accumulated deficit of $102.3 million as of June 30, Accentia said in its prospectus that it expects to be able to fund the Biovaxid trials being conducted by its subsidiary, BioVest, for the next six months but then will "need to raise substantial additional capital."
Jefferies & Co. Inc., of New York, acted as book-running manager for the IPO, with Chicago-based Robert W. Baird & Co.; Baltimore-based Ferris, Baker Watts Inc.; and Stifel, Nicolaus & Co. Inc., of St. Louis, serving as co-managers.
Point said it would not price its public offering of 6 million shares, from which the firm had expected to net about $27.3 million (if underwriters exercised their overallotment option), because of unfavorable market conditions - the same reason cited by Predix Pharmaceuticals Holdings Inc., of Lexington, Mass., when the company withdrew its IPO earlier last week.
Point recently started a Phase III program with its lead product, talabostat, in metastatic non-small-cell lung cancer, with a Phase II study testing the oral inhibitor of dipeptidyl peptidases against leukemia already under way. (See BioWorld Today, Oct. 17, 2005.)
With the NSCLC trial under way, Point will "definitely need the money," Bedrij noted, adding that she was "not sure what other [financing] alternatives they have on the table. Their guys are pretty smart [and] are probably weighing their options."
Point's stock (NASDAQ:POTP) closed Friday at $3.64, up 4 cents.
Predix had filed for its IPO in August to raise up to $69 million for general corporate purposes and to advance its product portfolio in generalized anxiety disorder, Alzheimer's disease and pulmonary arterial hypertension. The firm had set a price range between $10 and $12 per share. (See BioWorld Today, Aug. 5, 2005.)
