Assistant Managing Editor
A week after President and CEO Howard W. Robin told investors at the J.P. Morgan Healthcare Conference in San Francisco that Nektar Therapeutics Inc. planned to move into Phase III on its own with cancer drug NKTR-102, the firm priced a hefty public offering to bolster its cash reserves.
San Francisco-based Nektar did not disclose the share price for the 19 million shares. Tuesday's closing price of $12.34 would put gross proceeds at about $234.5 million, though shares likely were offered at a discount. Underwriter Jefferies & Co. Inc. has the option of purchasing an additional 2.85 million shares to cover overallotments.
Shares (NASDAQ:NKTR) dropped 90 cents on the dilution, closing Wednesday at $11.43.
Nektar had plenty of cash before this week's financing Robin told J.P. Morgan attendees that the firm ended 2010 with about $316 million on its balance sheet but the additional funds will come in handy when the midsized biotech launches a large Phase III program for NKTR-102, a topoisomerase I inhibitor-polymer conjugate. Planning is under way for an 800-patient study in metastatic breast cancer, slated to start in the fourth quarter of this year.
Analysts had been expecting a partnership for NKTR-102, particularly after the firm reported promising data at last year's American Society of Clinical Oncology meeting. And just last month at the San Antonio Breast Cancer Symposium, Nektar disclosed additional Phase II breast cancer data showing that the drug produced an overall response rate of 32 percent when given as a single agent.
Instead, Nektar has chosen, at least for now, to keep the drug for itself. In addition to breast cancer, NKTR-102 also has shown promise in ovarian cancer and colorectal cancer.
Two other late-stage programs are being advanced by partners. Nektar picked up a $125 million up-front payment in a 2009 deal with AstraZeneca plc, in which the London-based pharma firm gained rights to NKTR-118, an oral peripheral opioid antagonist expected to begin Phase III testing this quarter in opioid-induced constipation, as well as NKTR-119, an early stage R&D program that combines various opioids with NKTR-118. (See BioWorld Today, Sept. 22, 2009.)
NKTR-061, an anti-infective drug partnered with Berlin-based Bayer AG, also is set to move into Phase III trials this year. That program is targeting Gram-negative pneumonias, including hospital-acquired, health care-associated and ventilator-associated pneumonias.
On its own, Nektar has several early clinical and preclinical programs, including NKTR0181, a mu-opioid analgesic candidate expected to begin clinical testing this year.
Proceeds from the latest financing, expected to close Jan. 24, are being raised to support general corporate purposes, including R&D costs, working capital, repaying or repurchasing debt, funding acquisitions or conducting share repurchases.
In other financings news:
Oxigene Inc., of South San Francisco, entered warrant exchange agreements with each of the holders of outstanding warrants issued March 2010. The agreements are expected to simplify the company's balance sheet and help it regain compliance with Nasdaq listing standards. Shares of Oxigene (NASDAQ:OXGN) closed Wednesday at 22 cents, down 2 cents.
Pharmasset Inc., of Princeton, N.J., plans to sell 3 million shares of common stock in a public offering. Pharmasset is offering 2 million shares, with selling stockholders offering about 1 million shares. Underwriters will have a 30-day option to purchase an additional 450,000 shares to cover any overallotments. Net proceeds are expected to support general corporate purposes, including clinical trials, in-licensing or M&A activities. Citi is serving as sole book-running manager, while Morgan Stanley is acting as co-lead manager. Shares of Pharmasset (NASDAQ:VRUS) closed Wednesday at $46.48, down $3.53.
pSivida Corp., of Watertown, Mass., is raising gross proceeds of $10.75 million in a registered direct offering of about 2. 15 million shares and warrants to purchase 537,500 shares of common stock. Net proceeds, which are expected to total about $9.9 million, will go toward general corporate purposes. pSivida develops sustained-release drug delivery products, including Iluvien (fluocinolone acetonide intravitreal insert) for diabetic macular edema. Iluvien, partnered with Alimera Sciences Inc., of Atlanta, received a complete response letter in December. Shares of pSivida (NASDAQ:PSDV) fell 6 cents Wednesday to close at $4.85. (See BioWorld Today, Dec. 28, 2010.)