Specialty pharma firm Jazz Pharmaceuticals Inc. filed for an initial public offering, hoping to raise $172.5 million to support commercialization of Luvox CR, an approvable drug for psychiatric disorders, and continued development of other pipeline products.

The Palo Alto, Calif.-based company has not yet determined the share price or number of shares to be offered. Upon completion of the offering, its stock would trade on Nasdaq under the ticker "JAZZ."

Founded in 2003 to develop drugs for neurological and psychiatric disorders, Jazz works to enhance known compounds using new formulations and drug delivery approaches. The company gained its first marketed products via its April 2005 acquisition of Minnetonka, Minn.-based Orphan Medical Inc., most notably Xyrem (sodium oxybate oral solution) for cataplexy and daytime sleepiness in narcolepsy patients.

Sales of Xyrem accounted for more than half of the company's $41.9 million revenue in 2006. (See BioWorld Today, April 20, 2005.)

In its prospectus, Jazz said proceeds from the IPO would support the commercial launch for Luvox CR (fluvoxamine maleate extended-release capsules), a selective serotonin reuptake inhibitor licensed in January from Marietta, Ga.-based Solvay Pharmaceuticals Inc. The product was deemed approvable last month for treating obsessive compulsive disorder and social anxiety disorder. Pending approval, Jazz expects to begin promoting Luvox CR in the U.S. in early 2008, at which time it plans to more than double its 55-person sales force.

A portion of funds also would be used for ongoing development of the company's clinical pipeline, which includes JZP-6, a liquid dosage form of Xyrem that is in two pivotal Phase III studies in fibromyalgia syndrome (FMS). Preliminary results from the first of those trials are expected in the second half of 2008. Xyrem's European marketing partner, UCB SA, of Brussels, Belgium, also has rights to JZP-6 in FMS.

Jazz intends to start Phase II studies this year with JZP-4, a Type IIa sodium channel antagonist for epilepsy and bipolar disorder, and with JZP-8, a formulation incorporating benzodiazepine for treating acute repetitive seizure clusters in refractory epilepsy patients. Earlier in the pipeline, the company has JZP-7, a dopamine agonist, which will be evaluated in an additional pharmacokinetics study later this year before beginning Phase II studies in restless legs syndrome. A fast-acting version of benzodiazepine, JZP-2, is expected to enter the clinic in 2007 as an acute treatment of panic attacks associated with panic disorder.

Any remaining proceeds will be put toward working capital, capital expenditures and general corporate purposes.

Jazz, which reported a net loss of $59.4 million for 2006, ended the year with cash and cash equivalents totaling $78.9 million. The company said that those funds, combined with the IPO proceeds, plus anticipated revenues and royalties from product sales, should sustain operations for at least the next 12 to 18 months.

As of Dec. 31, Jazz had 205.2 million shares outstanding. Its principal stockholders consist of funds affiliated with several investment groups, including Kohlberg Kravis Roberts & Co. LP, which holds 98.1 million shares, or about 48 percent of the company; Thoma Cressey Bravo Inc., with 22 million shares, or 11 percent; Beecken Petty O'Keefe & Co., with 14.7 million shares, or 7 percent; Prospect Venture Partners and Versant Ventures, each of which owns 13.7 million shares, or almost 7 percent; Golden Gate Capital, with 11 million shares, or 5 percent; and Lehman Brothers Holdings Inc., with 10.7 million shares, or 5 percent.

Morgan Stanley, Credit Suisse, Lehman Brothers and Natexis Bleichroeder Inc. are acting as underwriters for the offering.