BioWorld International Correspondent

LONDON - Allergy Therapeutics Ltd. met the target of £15 million (US$26.7 million) in its listing on the Alternative Investment Market in London, but fell short of the hoped-for valuation of £55 million, placing 23 million shares at 73 pence each for a market capitalization of £46 million.

Keith Carter, CEO, told BioWorld International, "The [valuation] is a bit lower than we were aiming for, but we did pull this off quite quickly, and it is difficult as so many other people are looking for money."

Those competing for funds included VASTox plc, which also completed a £15 million fund raising this week. The Oxford-based chemical genomics company joined AIM with a market capitalization of £42.3 million.

Worthing, UK-based Allergy Therapeutics (ATL) was formed by a management buy-in of SmithKline Beecham plc's allergy vaccines business in June 1998, for £20 million. GlaxoSmithKline plc (SmithKline's successor) retains a 26 percent stake, along with Elan Corp. plc, of Dublin, Ireland, with 14 percent, and the Dutch financial services group ING NV, with 40 percent. The remaining equity is owned by the founders and employees. None of the existing corporate investors followed on.

Carter said: "We are pleased with the spread of new investors. They include some of the best names and will be long-term holders [of the stock]. The brokers did a good job."

ATL wants the money to further increase the potency and patient acceptability of its allergy vaccines by adding the adjuvant monophosphoryl lipid A (MPA).

The company has 235 staff, including 50 sales representatives, and the largest market for its products is Germany.

ATL has a long history, with roots going back to the formation of a specialist allergy company, CL Bencard Ltd., in 1934. Bencard later was acquired by Beecham Group Ltd., a forerunner of GSK. ATL's Pollinex vaccine to desensitize sufferers of grass pollen allergies was launched in 1972.

But at present the market potential of Pollinex and ATL's other allergy vaccines is constrained, because the treatments involve patients attending specialist clinics for skin tests to determine what is causing their allergic reaction. In the case of hay fever, patients then require a series of injections in advance of the hay fever season. The efficacy of the vaccines varies from patient to patient, and some might still require other remedies.

ATL believes it can grow the market significantly through the addition of MPL. In clinical trials to date, the adjuvant has produced a more rapid response with fewer injections at lower doses, and patients have shown a higher response rate than with vaccine alone.

A Pollinex hay fever vaccine incorporating MPL has been available in Germany on a named-patient basis for the past three years. It involves four injections three weeks prior to the hay fever season. The product is in Phase III trials.

Achieving immunity with four injections would be an improvement on products that are marketed in Europe, Carter said. "We do think we could increase the number of patients treated because at present you require up to 24 shots in the first year with most products."

ATL hopes the improvements attained by the addition of MPL will enable its vaccines to be available by prescription from general practitioners, rather than through specialist clinics.

The company also has preclinical data indicating efficacy for a sublingual formulation, which would open the door for self-administration. Carter said ATL is ready to start a Phase I trial of the sublingual vaccine. "MPL has important effects when delivered mucosally, and the animal studies have been really very exciting."

ATL acquired certain rights to use MPL in allergy vaccines from Corixa Corp., of Seattle, in September 2000. That involved amending an original deal between SKB and Corixa's forerunner, Ribi ImmunoChem Research Inc., agreed to in October 1998.

ATL has clinical evidence that the addition of MPL to its vaccines drives the balance of the immune response from TH2 to TH1, thus preventing the release of histamine.

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