In an effort to list its stock in the U.S., Canadian specialty pharmaceutical company Labopharm Inc. filed with the SEC to offer 10 million common shares.

The Laval, Quebec-based company also filed a short form prospectus with Canadian securities regulators. Most of the shares, however, are expected to be sold to U.S. investors through an initial public offering on the Nasdaq National Market under the symbol "DDSS."

Labopharm's shares (TSE:DDS) currently are traded in Canada and closed Wednesday at C$8.22, up C6 cents. At that price, the offering would raise the company C$82.1 million (US$72.3 million) in gross proceeds, but the company's SEC filing listed the maximum offering price as $7.64, which would bring Labopharm something closer to $76.4 million.

The company's officials were under an SEC quiet period Wednesday, but the prospectus said net proceeds would support the commercialization of its once-a-day tramadol product and would advance development of other pipeline candidates. Remaining proceeds would go toward working capital and other general corporate purposes.

Joint book-running managers for the proposed IPO include New York-based firms Merrill Lynch & Co. and Banc of America Securities LLC. Co-managers are Canaccord Capital Corp., of Vancouver, British Columbia; Leerink Swann & Co., of Boston; and Toronto-based firms Orion Securities Inc., Dundee Securities Corp. and Westwind Partners Inc. The underwriters have an overallotment option to purchase up to an additional 1.5 million common shares, which could bring Labopharm another $11.5 million in proceeds.

News of the IPO filing comes just a week after Labopharm announced that tramadol achieved statistical significance in a Phase III trial. The randomized, double-blind, parallel study called MDT3-005 was conducted under a special protocol assessment with the FDA and compared the safety and efficacy of tramadol to placebo over 12 weeks. About 1,000 patients enrolled in the trial had moderate to severe pain associated with osteoarthritis of the knee, and each received either 200 mg or 300 mg of tramadol or placebo. Tramadol reached statistical significance for the primary endpoint (p=0.0157), which was the comparison of baseline pain intensity with pain intensity at the end of the study period as measured by the 11-point Pain Intensity Numerical Rating Score.

Tramadol is marketed in Germany and has received regulatory approval in 21 other European countries. As Labopharm's lead product, it incorporates the company's Contramid controlled-release technology. Tramadol is an analgesic that has been on the market for nearly three decades in formulations requiring more than one dose a day, but Labopharm's product appears to provide pain relief lasting 24 hours and to have a lower incidence of major side effects.

Labopharm's shares fell 26.4 percent in September 2004, closing at C$3.13, when the company decided to conduct the Phase III trial as a way to make up for a previous study that fell short. Earlier, in January of that year, the company reported data from two U.S.-based Phase III trials, one of which met its three co-primary endpoints and one that missed two of them. (See BioWorld Today, Jan. 30, 2004, and Sept. 23, 2004.)

The company received $10 million in debt financing last July from Hercules Technology Growth Capital Inc., of Boston, then signed an agreement a month later giving Purdue Pharma LP, of Stamford, Conn., exclusive rights to market, sell and distribute tramadol in the U.S. The deal, worth $170 million, included a $20 million up-front licensing fee to Labopharm, as well as royalties ranging from 20 percent to 25 percent of product sales. The company also retained co-promotion rights for certain medical specialties.

It filed the new drug application in the U.S. late last year, and the PDUFA date for once-daily tramadol is scheduled for Sept. 28.

Aside from the lead product, Labopharm has three other clinical development candidates, including a once-daily formulation of trazodone. Trazodone is indicated for depression and administered as a twice-daily or three-times-a-day product. Labopharm expects to move its one-a-day version into Phase II trials later this year.

As of Dec. 31, Labopharm had $29.9 million in cash, cash equivalents and short-term investments. Following the IPO, the company expects to have 53.9 million shares outstanding.