BioWorld International Correspondent

TopoTarget A/S is bidding to become the first biotechnology company to complete an initial public offering on the Copenhagen Stock Exchange in almost five years.

The company is planning to issue 8 million to 10 million shares. Unconfirmed reports indicate it is seeking about €70 million (US$86.4 million).

Copenhagen, Denmark-based TopoTarget said it would use the proceeds to fund its cancer drug development activities and, eventually, build up its marketing capabilities. The company has eight programs in the clinic. Its lead drug candidate, a topoisomerase II inhibitor called Savene, is undergoing a Phase II/III trial for topical treatment of extravasation following intravenous administration of anthracycline to cancer patients. It aims to launch the product in 2006.

The company has raised €33.5 million in total funding since its formation in 2000. It has completed two acquisitions during its development: Prolifix Ltd., of Oxford, UK, and G2M Cancer Drugs AG, of Frankfurt, Germany. It has forecast R&D spending of DKK115 million (US$19.1 million) to DKK125 million in 2005, rising to DKK170 million to DKK180 million in 2006.

Its collaboration with CuraGen Corp., of New Haven, Conn., on histone deacetylase inhibitors, as well as amortization on licenses and immaterial rights, will account for one-third of its R&D expenses in 2005 and one-quarter in 2006. Including administration and marketing costs, it expects to post a loss of DKK70 million to DKK90 million in 2005.

The wider European biotechnology IPO market remains shaky. Several companies, including Speedel Group, of Basel, Switzerland, and Renovo Group plc, of Manchester, UK, recently have pulled IPOs. Newly listed Arpida AG, of Muenchenstein, Switzerland, is trading well below its offer price, while Galapagos NV, of Mechelen, Belgium, is just marginally above its pricing, which came in below its forecast range.

TopoTarget's IPO also coincides with two other biotechnology fund-raising transactions on the Copenhagen exchange. Pharmexa A/S, of H rsholm, Denmark, is seeking up to DKK295 million in a rights issue. It already has obtained commitments in excess of DKK150 million, thus ensuring the transaction will proceed. Bavarian Nordic A/S, of Kvistgård, Denmark, is seeking up to DKK400 million.

Nevertheless, Danish interest in biotechnology stocks, particularly among retail investors, remains high, said analyst Annette Rye Larsen, of HSH Gudme in Copenhagen.

"There is a lack of investment opportunities right now. That could bode well for TopoTarget," she said. "The window is open, but it's not completely open. A lot depends on the price."

The last biotechnology company to float in Copenhagen was Genmab A/S, which raised gross proceeds of DKK1,560 in October 2000. Larsen said just one other company, an IT firm, has listed in Copenhagen since then.

ABN AMRO Rothschild subsidiary Alfred Berg; Danske Markets, a Division of Danske Bank A/S; and Handelsbanken Capital Markets, a division of Svenska Handelsbanken AB, have been appointed joint global coordinators and bookrunners.