West Coast Editor

Almost a year after its $57 million Series A private equity financing, Aspreva Pharmaceuticals Inc. priced its initial public offering of 7.2 million shares at $11 per share (C$13.68), raising $79.2 million for the Victoria, British Columbia-based firm.

Aspreva's stock (NASDAQ:ASPV) closed Friday at $14.79, up $3.79, or 34.5 percent.

The company had targeted $100 million in January, and set the price range the following month at $13 to $15 per share. Underwriters have an option to buy up to about 1.1 million shares as overallotments. Net proceeds are expected to total about $70.7 million, or about $81.7 million if the underwriters exercise their option.

Of the four IPOs to price this year, Aspreva's after-market performance tops rivals the satisfying record of the year's first, ViaCell Inc., which priced at the low end of its anticipated range of $7 to $9, but jumped 24 percent the first day of trading. The Boston-based company (NASDAQ:VIAC) closed Friday at $8.54, down 44 cents.

Next in the IPO lineup to price is likely to be CombinatoRx, also of Boston, which - like Aspreva - first targeted $100 million. That was revised downward March 2, with the company shooting for 6 million shares at a range between $10 and $12, which at the top end would raise $72 million. (See BioWorld Today, Dec. 14, 2004.)

Aspreva's IPO prospectus breaks down the use of proceeds from its offering. About $14 million will be spent on starting the Phase III trial with the immunosuppressive agent CellCept (mycophenolate mofetil) for induction and maintenance treatment of lupus. The drug, licensed from F. Hoffmann-La Roche Ltd., of Basel, Switzerland, already is approved for transplant rejection.

Specifically, the company plans to start a six-month induction study involving an unblinded comparison of CellCept to intravenous cyclophosphamide, an anticancer agent, followed by a maintenance study of up to three years involving a blinded comparison of CellCept to the immunosuppressant azathioprine. The induction part of the study is likely to finish in late 2006.

Another $6 million will pay for continuing the ongoing Phase III study with CellCept against the neuromuscular disorder myasthenia gravis, and about $5 million will be used to fund the continuing Phase III trial with the same compound against pemphigus vulgaris, a skin disease.

The myasthenia gravis program will involve 136 patients at sites in Europe, North America and Israel, with the trial expected to finish in late 2006. Depending on the outcome of talks with the FDA, the company's goal is to enroll 64 patients in the pemphigus vulgaris trial at sites in North America, the European Union and the Middle East, with a completion date in 2007.

About $15 million of the proceeds will fund market research, continuing medical education, medical liaisons and product launch preparation for CellCept.

The balance of the IPO net, along with available cash and revenues from the Roche deal, will go toward potential new indications for CellCept, as well as working capital and general corporate purposes. At the end of last year, Aspreva had about $35.8 million in cash and marketable securities. Aspreva's Series A financing in the spring of 2004 consisted of $53 million in venture capital funds and $4.2 million in converted debt. (See BioWorld Today, March 11, 2004.)

Leading the IPO's underwriting syndicate is Merrill Lynch & Co., of New York, with co-leader Banc of America Securities LLC, also of New York. The deal is co-managed by Pacific Growth Equities LLC, of San Francisco, and BMO Nesbitt Burns Inc., of Vancouver, British Columbia.