By Lisa Seachrist
Washington Editor
Tularik Inc. filed a registration statement seeking about $70 million in an initial public offering as a means to continue development and research into orally available therapies for cancer, cytomegalovirus, diabetes, obesity, inflammation, immune disorders, hypercholesterolemia and bacterial diseases.
The company proposed selling 6.25 million shares of common stock at a price of $11 to $13 per share. South San Francisco-based Tularik estimates the offering will net $69.25 million after deducting the underwriting discount and offering expense. That total could be bumped up to $79.71 million should the underwriters exercise their over allotment option on 937,500 shares.
Lehman Brothers of New York, is leading the offering with Hambrecht & Quist LLC, J.P. Morgan & Co. and Warburg Dillon Read LLC, all of New York, also serving as underwriters.
Tularik's drug discovery program is based on gene regulation and allows for the identification of small-molecule, orally active drugs for a wide variety of diseases. Tularik's business plan is to focus on large commercial markets with unmet medical needs.
The company has or is about to start clinical trials of three cancer drugs: lometrexol, T67 and T607. Lometrexol is an anti-folate, which the company recently licensed to Eli Lilly and Co., of Indianapolis. Anti-folates such as methotrexate have proven effective in a number of tumor types.
T67 acts on tubulin, the proteins that make up the microtubule cytoskeleton and control cell division. Tubulin is a well-known cancer target as both Taxol and vincristine act on tubulin. However, in contrast to those agents, T67 remains active against tumor cells that are multiple drug resistant (MDR) and can cross the blood-brain barrier. To date, 23 patients have been enrolled in Phase I studies of T67. The company plans to move to Phase II studies in several tumor types, including brain tumors.
T607, an analogue of T67, also targets tubulin and is active against MDR-positive tumors. Animal studies indicate T607 has little ability to cross the blood-brain barrier and the company is looking at the drug's utility against other tumor types. It recently filed an investigational new drug application to commence clinical studies.
Tularik also has a program in orphan nuclear receptors (ONRs). Nuclear receptors are a family of transcription factors that play important roles in nearly all aspects of development and adult physiology and as a result have relevance to multiple disease indications. Until the natural ligand corresponding to a nuclear receptor is identified, it is known as an orphan. Tularik is using a proprietary screen to identify stimulators and inhibitors of these receptors. The company has a collaboration with Japan Tobacco Inc., of Osaka, to develop ONRs.
The company has corporate collaborations with Knoll Pharmaceutical Co., of Mount Olive, N.J., relating to obesity; with Roche Bioscience, of Palo Alto, Calif., relating to inflammation; with Taisho Pharmaceutical Co. Ltd., of Tokyo, relating to immune disorders; and with Sumitomo Pharmaceuticals Co. Ltd., of Osaka, Japan, relating to hypercholesterolemia.
As of June 30, the company had $111.2 million in cash, cash equivalents and marketable securities. The IPO is being conducted in anticipation of spending increases resulting from an increasing number of clinical programs.