West Coast Editor

Having cranked along to this point primarily by way of selling about $145 million of its preferred stock, Intarcia Therapeutics Inc. filed for an initial public offering that targets $86.25 for cancer and hepatitis C virus programs.

The Emeryville, Calif.-based firm joins a cluster of others that have filed and priced recently, as fresh air gusts through an IPO window that's at least halfway open - for now, anyway, and even if many of the offerings have been pricing low.

"It's one of the things that make it so nerve wracking for a company," said Jay Ritter, professor of finance at the University of Florida in Gainesville, adding that the picture "might look bright, but if they start on [the IPO] today, they have no way of predicting whether the market is going to be receptive or not five months from now." Ritter has been studying IPOs for 25 years.

Some biotech pundits last year predicted an open IPO window in early 2005, but Ritter said there's no way experts can gain certainty.

"They guess," he said. "Sometimes they're right, sometimes they're wrong." Whether the window opens is "usually driven by scientific breakthroughs or disappointments," and sometimes by regulatory as well as political events, he said.

Intarcia, in a quiet period as required by SEC rules, has not yet specified the number of shares or price per share, but said proceeds (along with the company's $20.7 million in cash and equivalents as of Sept. 30) are expected to fund operations for the next two years.

Projects over that time period include patient enrollment for the second Phase III trial with atamestane combination therapy for breast cancer, preclinical development and the finish of Phase I trials with omega Duros for HCV, and completion of a Phase II trial of injectable omega interferon, also for HCV.

The IPO cash plus current reserves would be enough to start pivotal trials with omega Duros, which is delivered by way of an implantable device to which rights were gained from ALZA Corp., of Mountain View, Calif., according to the IPO prospectus. Omega Duros allows for the continuous delivery of omega interferon for three or more months with a single administration through a subcutaneous implant.

Intarcia's lead product, though, is atamestane, an oral steroidal aromatase inhibitor acquired from Berlin-based Schering AG for hormone receptor-positive advanced breast cancer. It's used in combination with toremifene, an estrogen receptor blocker for disease in post-menopausal women.

Two Phase III studies are under way for first-line breast cancer treatment, both comparing the combo therapy to Femara (letrozole), an aromatase inhibitor approved in 2001 from Novartis Pharmaceuticals Corp., of East Hanover, N.J.

Enrollment in the first study is complete and the second is ongoing. Data from the first are expected in the first half of next year. If they're positive, Intarcia plans to file a new drug application and start more trials in the adjuvant setting.

Intarcia is shooting for a co-promotion deal for the combo therapy in the U.S., and wants to keep all marketing rights outside the country.

Incorporated in June 1995, the company began operations in February 1997, and carries an accumulated deficit since inception of $83.1 million.

Intarcia's $86.25 million coincidentally is the same target as Threshold Pharmaceuticals Inc., of Redwood City, Calif., which last week fell significantly short, pricing its IPO of about 5.3 million shares at $7 per share, to raise about $37.3 million.

Favrille Inc., of San Diego, also priced lower than desired recently, selling 6 million shares at $7 each for total gross proceeds of $42 million, after intending to price the shares between $12 and $14 and then reducing the range to between $7 and $8.

ViaCell Inc., of Boston, last month priced its IPO, selling 7.5 million shares at $7 a share, raising $52.5 million. The anticipated range had been $7 to $9. Icagen Inc., of Research Triangle Park, N.C., raised $40 million in its IPO, pricing 5 million shares at $8 apiece, after setting a $10 to $12 range in January.

"Normally the price range that's set is based upon what the market is paying for companies that may be closely related," Ritter said. "Very frequently they decide to go public when there's been a recent increase in the prices of those publicly traded firms. If the prices stayed up, they could justify their higher prices, but all too frequently there's a bit of a market sell-off."

Others to file IPOs recently include XenoPort Inc., of Santa Clara, Calif., seeking $86.25 million in proceeds, and Synta Pharmaceuticals Corp., of Lexington, Mass., aiming for $115 million.

No Comments