The roster of publicly traded biotech companies continues to grow, with SGX Pharmaceuticals Inc. pricing a $24 million initial public offering on Tuesday and Iomai Corp. pricing a $35 million IPO on Wednesday, while AngioGenex Inc. merged with a publicly held entity in an effort to secure its own listing.
For the two IPOs, though, their values came in much lower than planned. SGX had filed for an $80.5 million offering when unveiling its plans late last summer; a month later, Iomai filed to raise an estimated $86.3 million. (See BioWorld Today, Sept. 6, 2005.)
Both deals stand in contrast to an IPO that closed last week, when Altus Pharmaceuticals Inc. raised $105 million.
The Cambridge, Mass.-based company's deal was clearly at the high end of the spectrum, with only two of the 33 IPOs that priced last year worth more. The offerings conducted by SGX and Iomai fall more in line with most other biotech IPOs in the recent past. (See BioWorld Today, Jan. 29, 2005.)
SGX To Fund Lead Cancer Drug
San Diego-based SGX, which previously was called Structural GenomiX Inc., sold 4 million common shares at $6 apiece. That price reflects a slight discount from the company's prior range of $7 to $8 for the IPO. On Wednesday, the stock (NASDAQ:SGXP) began trading and closed at $6.
Company officials could not address the deal per SEC rules, but a previously filed prospectus said the proceeds would fund research and development activities, including completing the pivotal trial of its cancer drug Troxatyl.
The Phase II/III trial is testing the cytidine analogue's use as a third-line treatment for acute myelogenous leukemia, while other programs are evaluating it in various solid tumors.
Remaining funds from the IPO are earmarked for working capital, general corporate purposes, cover acquisitions and in-licensing activities. The company, which offered all the shares, also granted the underwriters a 30-day, 600,000-share overallotment option.
CIBC World Markets Corp., of New York, and Piper Jaffray & Co., of Minneapolis, acted as the IPO's joint book-running managers. New York-based JMP Securities LLC was co-manager.
Incorporated nearly eight years ago, SGX raised $84.5 million in three previous private rounds of financing worth $7.5 million, $32 million and $45 million, respectively. (See BioWorld Today, Dec. 19, 1999; April 5, 2000; and Sept. 20, 2000.)
Following the IPO, SGX has 14.2 million shares outstanding.
Iomai's IPO Half Of That Planned
Iomai sold 5 million common shares at $7 each, and the stock (NASDAQ:IOMI) traded down 20 cents to close at $6.80 Wednesday.
The Gaithersburg, Md.-based biopharmaceutical company, which is developing dermally delivered vaccines and immunostimulants through its transcutaneous immunization technology, previously said it expects to use its proceeds to fund clinical trials, including studies for its needle-free travelers' diarrhea vaccine patch and other patches in development, and to support other research and general corporate purposes.
Iomai, which previously set a per-share price range of $11 to $13 before lowering the figure, also granted the underwriters a 750,000-share overallotment option. Company officials could not speak due to SEC rules.
UBS Investment Bank, of New York, acted as the offering's sole book-running manager. SG Cowen & Co., also of New York, was co-lead manager, with co-management from New York-based First Albany Capital and Philadelphia-based Susquehanna Financial Group.
Three years ago, Iomai raised $54 million in a Series C financing, and has brought in more than $80 million in investments since its founding in 1997. The company has 16.9 million shares outstanding following its IPO.
Nine biotech companies remain in the IPO queue, according to BioWorld Snapshots.
AngioGenex Public, But Not Traded
For AngioGenex, a virtual company formed about five years ago around an angiogenesis platform, the route to the public markets involves a buyout of a public shell company, eClic Inc. The strategy behind the merger: to improve the terms upon which AngioGenex will be able to raise capital necessary to test its Id inhibitor anticancer drug leads and diagnostics.
"We've taken an important step on the path to liquidity," said Michael Strage, the New York company's director of corporate communications and investor relations, and that was necessary because of ongoing investor reluctance to back early private firms, he said. "Everyone's interested in liquidity."
Prior term sheets would have left AngioGenex with considerable convertible debt overhang. Instead, on a diluted basis, its existing shareholders will own 94 percent of the post-merger company, and that "seems to have loosened up" the financing proposals, Strage told BioWorld Today. Now the company is looking to raise about $5 million through an equity placement.
Once AngioGenex completes its current fund-raising efforts, it will apply for listing on the Over-The-Counter Bulletin Board. The company's management is run by alumni of F. Hoffmann-La Roche Ltd., of Basel, Switzerland.
Its angiogenesis research is focused on developing drugs that inhibit Id genes or proteins to halt blood vessel growth in certain cancers. To date, the company's efforts have characterized the gene's structure and produced leads following successful screening work.
The Id discoveries stem from the Memorial Sloan Kettering Cancer Center in New York, and also have shown promise for treating ocular diseases such as diabetic retinopathy and age-related macular degeneration. Strage said AngioGenex would like to partner its ocular programs to provide further funding for focusing in oncology. Already, the company has an agreement with BioCheck Inc., of Foster City, Calif., to develop cancer diagnostic and prognostic products based on the Id-gene platform technology and Id antibodies discovered by BioCheck.