West Coast Editor

Having turned away from the public market (at least for now), Amicus Therapeutics Inc.'s president and CEO John Crowley sounded more than pleased last week with $60 million gained through a Series D financing.

"I probably could have raised three times as much from the private-equity world," he mused.

But with $40 million already on hand, Crowley didn't need to - which helps explain how Amicus raised enough cash to keep the company going to at least 2009, said Jamie Topper, partner with Frazier Healthcare Ventures in Palo Alto, Calif.

The Series D came about six weeks after the firm backed away from its bid for an initial public offering because of unfavorable market conditions.

"It wasn't that we had to do a financing one way or another, so we're going to do [the Series D]," Topper said.

Frazier, an investor since 2004, took part in the latest round, and Topper sits on Amicus' board.

"We were prepared to do a very successful IPO, but the market tanked over the summer," Topper said. "[Underwriters] Morgan Stanley and Goldman, Sachs were very up front with us," telling Amicus that the IPO could get done, but would not prove as lucrative as another route, he said.

"Also, we didn't want to slow the company down" with external fund raising if there was a more promising method, he said.

Topper called Stamford, Conn.-based Amicus "a unique case," and pointed to the company's pharmacological-chaperone technology, which he predicted will "transform the way we treat a whole area of diseases" - and not only lysosomal storage disorders, for which Amicus is developing its first oral small molecules. (See BioWorld Today, Sept. 15, 2006.)

Designed to restore the patient's own enzymes, the Amicus chaperone selectively binds to the target protein, folding it into correct shape for more activity and improved cell function.

"We're rescuing endogenous proteins," Topper said, and noted that fixing misfolded proteins could be useful in many other disease areas.

A just-published book details Crowley's drive to find a cure for LSDs, one of which (Pompe disease) struck two of his children. Timing of the book's release was "more of a coincidence than anything else," Topper said, although quiet-period restrictions on the IPO caused Amicus officials to spend a lot of time with lawyers, discussing whether Crowley would be free to take part in promotion of the book written about him.

In the end, it didn't matter. What matters, Topper said, is Amicus' strong fundamental science. Had the basic research been less solid, "we probably just would have sat on our existing cash and moved forward at a rate that was more conservative," he said.

"Ninety percent of the [Series D investment] was made by insiders, who know the company extremely well," Topper said. Frazier is among them, having first put money into a Series B round, before Crowley came aboard in 2005 from San Diego-based Orexigen Therapeutics Inc.

"We courted him for a while and were lucky to get him," Topper said.

Crowley earlier founded Novazyme Pharmaceuticals Inc., of Oklahoma City, which Cambridge, Mass.-based Genzyme bought in 2001 in a stock deal originally valued at about $137.5 million. Novazyme, like Amicus, sought cures for LSDs.

Obesity-focused Orexigen represented a departure for Crowley.

"I worked for about a year and a half with the folks at Domain Associates in Princeton, N.J., and Orexigen was one of the unique business opportunities we identified," he said. "My job was to get it up and running that first year or so."

Others to file for IPOs in recent weeks include Rosetta Genomics Ltd., of Rehovot, Israel, which hopes to raise $39 million for diagnostics, and Emergent Biosolutions Inc., of Gaithersburg, Md., which listed $86.25 million as the target price.

Stem cell firm Osiris Therapeutics Inc., of Baltimore, managed to go public last month, raising gross proceeds of $38.5 million. (See BioWorld Today, Sept. 7, 2006, Sept. 1, 2006, and Aug. 7, 2006.)

Amicus likely will try again, too.

"If the markets open up next year, it's absolutely something we would think about," Topper said.

In the big picture, though, more is required these days of biotech firms that seek to go public, and the situation likely will not change, said Mike Raab, partner with New Enterprise Associates in Menlo Park, Calif., which led the Amicus Series D.

"Public markets aren't paying for the value these companies create," said Raab, a member of Amicus' board since 2004. "There's been a fundamental change, in terms of how and what a company needs to do [in order to go public]."

That change is part of the industry growing up, Raab told BioWorld Today. Public investors are "treating us like other businesses - rewarding us for clinical results" rather than promise.

Maybe the higher IPO demands are part of the cyclical movement seen in times past, but Raab doesn't think so. Today's world operates according to a structure "counter to [what has been] the general biotech investing model, but it's one we are going to have to get used to," he said.

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