Washington Editor

After scrapping initial IPO plans, Celldex Therapeutics Inc. decided to take a growth-by-acquisition route.

Yesterday, the Medarex Inc. subsidiary announced its purchases of a pair of privately held biotech firms, Lorantis Ltd. and Alteris Therapeutics Inc. Taken together, the new assets expand Celldex's operations with a Phase II brain cancer product, about $30 million in cash, several preclinical programs, a research and development team and certain other assets.

"We believe that with these acquisitions, we're a little bit more mature by bringing in a later-stage product than our own," said Anthony Marucci, Celldex's vice president and chief financial officer. "And we brought in some cash that will help us with our operations going forward."

He noted that the growth strategy does not signal a complete change in the Bloomsbury, N.J.-based company's plans to go public, but rather indicates a holding pattern of sorts. More than a year ago, the company registered for an estimated $50 million initial public offering, but in late August the company pulled its IPO registration statement. (See BioWorld Today, April 14, 2004.)

The company still hopes to go public, Marucci told BioWorld Today, "but in this market, we're going to take a look and constantly review. The market has been choppy, so we looked at these other strategies and put them forth."

Since the two acquisitions have closed, Princeton, N.J.-based Medarex Inc. now owns about 60 percent of Celldex, which is issuing 6.8 million shares of its Class A common stock for Lorantis and 1.2 million regular common shares for substantially all of Alteris' assets, as well as $1.5 million in cash and certain potential milestone and other payments.

Going forward, Lorantis' shareholders now own about 34 percent of Celldex and Alteris' backers hold the remaining 6 percent.

In addition to $30 million in cash, Lorantis' assets also include a preclinical program based on an immune mechanism called the Notch signaling pathway, which has been shown to selectively modulate immune responses. The Cambridge, UK-based company also has a research and development facility there, which will remain open for immunological research and molecular biology for the Notch technology and Celldex's existing APC Targeting Technology that uses monoclonal antibodies to target antigen-presenting cells.

Celldex's acquisition of Philadelphia-based Alteris is bringing on board ALT-110, a therapeutic cancer vaccine in an investigator-initiated Phase II study for brain cancer and in Phase I for prostate, gastric, non-small-cell lung and ovarian cancers. Interim analysis of the Phase II trial, which is being conducted at the Duke Comprehensive Cancer Center and at the M.D. Anderson Cancer Center, has demonstrated a significant increase in the time to disease progression relative to a historical control (p=0.0059).

The peptide is based on a variant of the epidermal growth factor receptor known as EGFRvIII, and Marucci said the company next plans to craft a protocol for the FDA's review before beginning a randomized Phase II trial in the first half of next year. In addition, Celldex will acquire several patent applications covering a technology platform for the discovery of new disease-specific targets called the Rapid Identification of Alternative Splicing. The Philadelphia site is closing.

In its existing portfolio, Marucci said Celldex plans to soon begin a Phase I/II study of its lead product, HCG-VAC, in solid tumors. That trial will test a subcutaneously delivered formulation of the cancer vaccine, while an intravenous version already is being evaluated in a Phase I breast cancer trial.

HCG-VAC was in-licensed from Medarex, of which Celldex previously was a wholly owned subsidiary. Celldex was incorporated in May 2003 as MabVac Inc.