As the first biotech firm to hit the public market via an initial public offering in 2007, Molecular Insight Pharmaceuticals Inc. is bringing in about $70 million to fund ongoing development work on its radiotherapeutics in cancer and its upcoming pivotal study of a molecular imaging agent in heart disease.

More than a year after filing for an offering in November 2005, the Cambridge, Mass.-based firm priced 5 million shares of its common stock at $14 each, the lower end of the $14 to $16 price range set last month. On its first day of trading the company's shares (NASDAQ:MIPI) ranged from $13.70 to $14.40 before closing up 5 cents at $14.05. (See BioWorld Today, Nov. 10, 2005.)

According to Molecular Insight's prospectus, it expects to use most of the estimated net proceeds of $67 million to further develop and expand its product pipeline. About $20 million is earmarked for clinical work with its lead targeted radiotherapeutic products, Azedra and Onalta, and the company has set aside about $22 million for late-stage development and commercialization activities for Zemiva, the lead molecular imaging agent.

Both the company's radiotherapeutics and molecular imaging agents were developed using the Ultratrace technology, which works by binding a compound to a radioactive isotope. The radiotherapeutics are designed to give off radiation to attack tumor cells, while the imaging agents give off radioactivity that can be visualized in an imaging procedure.

Azedra, an MIBG molecule that's been radiolabeled with the Ultratrace technology, is expected to begin a Phase I/II trial in adults in the first half of this year. The product initially will be developed for diagnosis and treatment of neuroendrocrine tumors, an indication for which it has both orphan and fast-track status, but pending positive results, the company likely will investigate Azedra in other cancer indications as well.

The company's second radiotherapeutic, Onalta (edotreotide), a radiolabeled somatostatin peptide, was in-licensed from Basel, Switzerland-based Novartis AG, which completed Phase I testing and several Phase II trials. Molecular Insight plans to meet with the FDA on a clinical investigation plan for Onalta's further development. That product also has orphan drug status in carcinoid tumors.

Molecular Insight recently added another cancer product, Solazed, to its pipeline, through a licensing deal with Berlin-based Bayer Schering AG. Solazed, a small-molecule benzamide compound that targets melanin, is in early development for melanoma tumors. Under the terms, Molecular Insight agreed to pay an up-front fee, milestones and royalties. (See BioWorld Today, Jan. 18, 2007.)

On the molecular imaging side, the company is moving forward with Zemiva, a product based on I-123-BMIPP, a chemical compound that's been available in Japan for more than 10 years. A radiolabeled fatty acid analogue, Zemiva is designed to allow doctors to visualize the heart's use of fats as an energy source, an observation that can be used to diagnose cardiac ischemia. Two Phase II studies have been completed, and a pivotal Phase II trial is expected to begin in the first half of this year, with a confirmatory Phase III registration trial. Assuming positive results, those two studies would be the basis for a new drug application.

Additional funds from the IPO will support manufacturing for Zemiva and Azedra, in-licensing of technologies or products, preclinical work, research and development and for working capital and other general corporate purposes.

For the first nine months of 2006, the company posted a net loss of $19 million. As of Sept. 30, it had cash and cash equivalents totaling $16.3 million. Prior to going public, Molecular Insights had pulled in about $50 million in venture capital and another $4 million in grants from the National Institutes of Health.

Prior to the offering, majority shareholders included Stephen Feinberg, CEO of New York-based Cerberus Capital Management LP, with 3.6 million shares, or 21 percent of the company, and several company executives led by Chairman and CEO David Barlow, who held 2.5 million shares, or 16 percent. Following the offering, Molecular Insight expects to have about 24.7 million shares outstanding.