BioWorld International Correspondent

LONDON - Cyclacel plc postponed its proposed dual listing on Nasdaq and the London Stock Exchange, citing market conditions, as Evolutec Group plc succeeded in getting its modest initial public offering away on London's Alternative Investment Market, raising £5.1 million (US$9.4 million) net of the £7.5 million net it had hoped for.

Cyclacel, of Dundee, was seeking £26.6 million to accelerate the development of its lead cancer treatment, an orally available, cyclin-dependent kinase inhibitor.

Spiro Rombotis, CEO, told BioWorld International market conditions deteriorated in the three weeks after the company launched the deal.

"We have first-class financial advisers, and obviously we wouldn't have got into the process if we thought it wasn't going to succeed," he said. He would not comment on whether there was any difference in the reception the company got in New York and London.

Cyclacel raised £21.3 million in January and £34 million in June 2001. It has resources for two years at its existing burn rate. Rombotis said the company wouldn't accelerate the development it had planned when considering a successful IPO.

Mark Carnegie Brown, CEO of Evolutec, was more cheerful, despite raising less than intended. The company was forced to adjust its price range down halfway through marketing the deal, and in the event placed 4.6 million shares at £1.25 per share and raised a further £300,000 from warrants.

Oxford-based Evolutec will have a market capitalization of £12.7 million when trading begins on AIM Aug. 2.

Carnegie Brown told BioWorld International: "I am delighted with the institutional investors we have got, and the structure going forward. The market is less easy than one might have anticipated, and I am happy with the outcome."

Carnegie Brown said the market became "tighter" in the four weeks required to complete the IPO. But, he added, it was worth the extra effort of listing rather than raising a another private round because it gives Evolutec the option to come back for more money.

The IPO window now might be closed. The recent European IPOs of Vectura Group plc and Norwood Immunology Ltd. in London, and Epigenomics AG in Frankfurt, Germany, were all at the bottom of their price range. Microscience Ltd. and Immuno-Designed Molecules SA pulled IPOs in London and Paris, respectively.

Evolutec is developing therapies for allergic, inflammatory and autoimmune diseases from compounds discovered in the saliva of ticks and other blood-sucking parasites. A tick injects an array of molecules into the skin of its host to suppress the immune response. Evolutec has discovered molecules that act as anticoagulants and anesthetics in tick saliva, also.

The lead compound, rEV131, a histamine-binding protein, has reached Phase II in allergic conjunctivitis, rhinitis and ocular inflammation. The company has generated positive preclinical data for rEV131 in asthma and acute respiratory distress syndrome.

Evolutec claims rEV131 is the only product in clinical trials that targets the H4 receptor, a recently discovered histamine receptor believed to be implicated in several types of inflammatory disease.

Evolutec has developed vaccine candidates against ticks and tick-borne diseases. In September, it agreed to a partnership with Merial Animal Health Ltd., of Harlow, for animal health care applications, and is looking for a partner for its human vaccines, which are active against Lyme disease and tick-borne encephalitis.

Raising less money than it was aiming for has obliged Evolutec to scale back on its proposed clinical program. The company will go ahead with Phase II trials in allergic rhinitis and Phase II and Phase III trials in post-cataract surgery.

"We will put back trials in a third indication, but we are holding firm to the strategy of getting early revenues in the eye and licensing rEV131 in large indications," Carnegie Brown said.

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