Optimer Pharmaceuticals Inc. priced a $49 million initial public offering on Friday, becoming the fifth biotech to test the public waters this month - and this year, for that matter, considering the complete absence of IPO activity in January.

Optimer priced 7 million shares at $7 each, below the company's most recent range of $8 to $9 and well below the original target of $12 to $14. Yet its shares (Nasdaq: OPTR) opened at $7.50 on Friday and traded up $1.00, or 13 percent, to close at $8.50. (See BioWorld Today, Nov. 13, 2006.)

BioLineRx Ltd. and Synta Pharmaceuticals Corp. also priced below their ranges this month, each bringing in $50 million. Molecular Insight Pharmaceuticals Inc. priced at the low end of its range, grossing $70 million, and 3SBio Inc. priced above its range, pulling in $115.2 million. In 2006, the 34 biotech IPOs to price brought in an average of $53 million per deal, according to research from PricewaterhouseCoopers LLP.

Although the current IPO window is discriminating, it doesn't seem to be in danger of closing. There are nearly a dozen biotech IPO hopefuls in the queue.

John Prunty, chief financial officer & vice president of finance for Optimer, said there were "a number of IPOs on the road" at the same time as Optimer. He added that the investors he met with were "very receptive" to the story, conducting "a lot of follow up and due diligence."

After fees and expenses, San Diego-based Optimer expects to net $44.1 million. The financing is the largest in the company's history, according to Prunty, and will bolster the $23.7 million in actual cash and equivalents Optimer had as of Sept. 30, 2006, providing sufficient capital to last about a year.

Approximately $12 million will fund clinical trials with the antibiotic Difimicin. Optimer is conducting a Phase IIb/III trial with the drug in Clostridium difficile-associated diarrhea (CDAD), the most common hospital-acquired diarrhea. The trial compares Difimicin to oral vancomycin, the only FDA-approved drug for CDAD, and data are expected in the fourth quarter. In the interim, the company plans to initiate a second Phase III trial with the same design in the first half of the year and anticipates the data from both trials will be sufficient to support a new drug application filing in the second half of 2008.

Clinical trials with Optimer's second antibiotic, Prulifloxacin, will eat up about $3 million. Prulifloxacin is a prodrug that converts to the active form ulifloxacin following oral administration. The company is conducting two Phase III trials for the treatment of travelers' diarrhea and expects data in the second half of the year. The drug is marketed by other companies in Japan and Italy, and Optimer hopes the Phase III data and a planned Phase IV trial will be sufficient to support an approval.

The largest chunk of Optimer's cash, about $22 million, is earmarked to buy back North American marketing rights to Difimicin from Par Pharmaceutical Inc., who purchased them in April 2005. That would allow Optimer to assemble a hospital-based sales force that could market both products, Prunty said.

The remaining funding will support pre-commercialization activities, working capital, and other purposes, including ongoing development of drug candidates using Optimer's One-Pot Synthesis (OPopS) drug discovery platform, a computer-aided method of synthesizing carbohydrate-based compounds. The company also is planning proof-of-concept trials with Difimicin in the prevention of both CDAD and vancomycin-resistant enterococcal (VRE) bloodstream infections.

Optimer has incurred $39.6 million in research and development expenses since inception. For the nine months ended Sept. 30, 2006, the company reported a net loss of $8.1 million. The current offering provides for 1.1 million shares to cover any overallotments and will result in 21.7 million shares outstanding.

Piper Jaffray & Co. and Jefferies & Company Inc. served as joint book-running managers in the offering, with JMP Securities LLC and Rodman & Renshaw LLC acting as co-managers.