Assistant

Coming off a year in which it advanced its multi-drug clinical-stage pipeline and scored a major deal with Genentech Inc., Bothell, Wash.-based Seattle Genetics Inc. has given no indication of slowing down, as it starts 2008 with a $90 million public offering.

The firm priced 10 million shares at $9 each, a slight discount to Thursday's closing price of $9.70. Shares (NASDAQ:SGEN) closed at $9.07 Friday, down 63 cents.

Net proceeds are expected to total about $84.8 million - or $97.5 million if underwriters purchase the full 1.5 million shares in overallotments - and will support ongoing research and development, including clinical trials, and for general corporate purposes. Those funds, added to Seattle Genetics' existing cash, which totaled $124 million as of Sept. 30, should carry the firm well past 2008.

In its prospectus, the company said it anticipates its 2008 burn rate to fall in the range of $55 million to $65 million. That should put it close to, if not less than, its 2007 cash burn, which, for the first nine months, totaled $53.7 million, with those increases attributed primarily to development and personnel expenses related to its three lead products, including work on SGN-40, for which Genentech reimburses the firm under the January 2007 collaboration agreement.

Terms called for South San Francisco-based Genentech to pay $60 million up front for worldwide rights to SGN-40, an anti-CD40 monoclonal antibody in development for non-Hodgkin's lymphoma (NHL) and multiple myeloma and could fork over up to $800 million in milestones, plus escalating double-digit royalties on product sales. To date, Seattle Genetics has recorded milestone payments of $20 million related to clinical development. (See BioWorld Today, Jan. 9, 2007.)

The company said it expects to complete enrollment in an ongoing Phase II trial testing SGN-40 as a single agent in diffuse large B-cell lymphoma (DLBCL). The drug also is in a Phase IIb trial in DLBCL in combination with Rituxan (rituximab, Genentech and Biogen Idec Inc.), and in Phase Ib studies testing SGN-40 in combination with Revlimid (lenalidomide, Celgene Corp.) in multiple myeloma and in combination with Rituxan in follicular and marginal zone NHL. Seattle Genetics and Genentech also plan to initiate this year a combination trial with Velcade (bortezomib, Millennium Pharmaceuticals Inc.) in multiple myeloma and a trial combining SGN-40 with Rituxan and Gemzar (gemcitabine, Eli Lilly & Co.) in DLBCL.

Under the terms of its Genentech deal, Seattle Genetics retains a co-promotion option in the U.S.

On its own, the firm continues advancing SGN-33 and SGN-35 in multiple cancer indications. SGN-33 (lintuzumab), which targets CD33, is in three Phase Ib trials: one in acute myelogenous leukemia (AML) and myelodysplastic syndromes (MDS), for which data are expected later this year; one in combination with low-dose cytarabine in AML; and one in combination with Revlimid in MDS patients.

SGN-35, an anti-CD30 drug developed using the firm's antibody-drug conjugate (ADC) technology, is in Phase I testing in Hodgkin's lymphoma and CD30-positive T-cell lymphoma.

Seattle Genetics expects to add one more compound to its clinical pipeline this year, likely SGN-70 in autoimmune disease. Other preclinical compounds include SGN-75 in hematologic malignancies and solid tumors and anti-CD19 ADC aimed at treating B-cell-derived hematologic malignancies.

The ADC platform, which had generated programs for its own pipeline, also has yielded a nice revenue stream in the form of several partnerships, including a potential $32 million deal with Branford, Conn.-based CuraGen Corp., which began working with Seattle Genetics in 2004 and has moved into Phase I testing for CR011-ADC in metastatic melanoma. Other partners over the years have included Fremont, Calif.-based PDL Inc. and Bayer Pharmaceuticals Corp.

Underwriters for the public offering include J.P. Morgan Securities, UBS Investments Bank, RBC Capital Markets, Needham & Co. LLC and William Blair & Co. LLC.

Following the offering, Seattle Genetics will have about 77.5 million shares outstanding.

In other financing news:

Accentia Biopharmaceuticals Inc., of Tampa, Fla., is raising about $8.7 million through a private placement offering of convertible preferred stock and warrants to new and existing institutional investors. The company expects the proceeds to support working capital, which will include funds for development, regulatory strategies and marketing plans. Accentia is in pivotal Phase III development of SinuNase in chronic sinusitis, with results expected in March. Funding is expected to support preparations for a new drug application, as well as to help initiate an eight-week study of a pump spray formulation for mild-to-moderate sinusitis and a confirmatory Phase III study of the intranasal lavage formulation. Rodman & Renshaw LLC acted as the exclusive placement agent. Shares of Accentia (NASDAQ:ABPI) closed at $2.54 Friday, down 9 cents.