On its second try, Idenix Pharmaceuticals Inc. got its initial public offering through, pricing 5.8 million shares and completing a concurrent private placement to raise a total of $140 million.
The IPO comes a little more than two years after the Cambridge, Mass.-based company first filed for it in 2002. That filing was withdrawn by the end of that year, and Idenix filed again in December. (See BioWorld Today, Dec. 16, 2003.)
The $140 million raised consists of $64.4 million in gross proceeds from the IPO, and another $75.6 million from a private placement with Novartis Pharma AG, a unit of Basel, Switzerland-based Novartis AG. Novartis, which previously held a 57 percent stake in the company, wanted to maintain that stake by purchasing another 5.4 million shares.
The IPO included the sale of 4.6 million shares from Idenix and another 1.2 million shares from selling stockholders, who raised $16.8 million for themselves. All shares in the private and public offerings were priced at $14 each.
Idenix's stock was listed on the Nasdaq National Market under the symbol "IDIX." The shares dropped 55 cents on Thursday to close at $13.45.
New York-based Goldman, Sachs & Co. acted as sole bookrunner and a co-lead manager with Morgan Stanley & Co. Inc., also of New York. Bear, Stearns & Co. Inc., of New York, acted as a co-manager for the offering. Stockholders granted underwriters an overallotment option for up to an additional 870,000 shares.
Idenix officials declined to comment due to an SEC-imposed quiet period, but the company's prospectus said it would use proceeds to further develop its products. Specifically, it will spend between $85 million and $95 million on NM 283, its lead hepatitis C virus drug candidate, which is in Phase I/II studies, and on products in preclinical development, including another HCV candidate, NV-08B, and an HIV candidate, NV-05A.
Idenix also intends to spend between $18 million and $22 million to further develop its sales and marketing capabilities as it prepares to launch telbivudine, which is in Phase III trials for hepatitis B virus. A new drug application is slated for late 2005.
Idenix is evaluating the oral, once-a-day treatment telbivudine in an international Phase III trial with more than 1,350 patients. The company also is screening patients with decompensated liver disease for a second, 240-patient Phase III trial to provide additional data for marketing applications.
Any remaining funds from the IPO and private financing will go toward working capital, capital expenditures and other general corporate purposes.
Idenix's prospectus said the proceeds will finance the development of NM 283 into Phase III trials and, at a minimum, move NV-08B and NV-05A into Phase I trials. The company is developing NM 283 as a single-agent therapy for use by patients for whom interferon-based treatment is not appropriate, or when it offers a more effective alternative to ribavirin in an interferon-based treatment combination. Idenix plans to move it into a Phase IIb trial later this year.
Another product that could enter a Phase IIb trial by December is the company's second HBV treatment, valtorcitabine, which is in development to be used in combination with telbivudine in a subset of patients who do not respond to single-agent therapy.
Idenix entered a collaboration potentially worth $862 million with Novartis Pharma in March 2003. Novartis gained a worldwide development and commercialization license to the lead HBV candidates, telbivudine and valtorcitabine. It agreed to fund all development and make milestone payments based on regulatory and sales achievements. Novartis also purchased from stockholders about 54 percent of Idenix stock, and retained an option to license Idenix's HCV and other candidates. If it does, Idenix would receive full development funding, license fees and, potentially, more milestone payments. Idenix received a $25 million milestone payment from Novartis last month for favorable results from the Phase I trial of NM 283.
As for the commercialization of products involved in the collaboration, Idenix plans to co-market them with Novartis in the U.S., the UK, France, Germany, Italy and Spain. Novartis holds exclusive rights in the rest of the world. (See BioWorld Today, March 27, 2003.)
Prior to their collaboration, a Novartis affiliate, Novartis BioVentures Ltd., owned about 3 percent of Idenix's stock, so the larger company has a 57 percent stake. With the purchase of another 1.2 million shares in the private placement, Novartis keeps that same percentage ownership in Idenix following the IPO.
Founded in May 1998, Idenix first filed for an IPO in 2002, when it was called Novirio Pharmaceuticals Ltd., intending to raise $115 million. The company changed its name later that year, then pulled the IPO due to unfavorable market conditions. (See BioWorld Today, April 16, 2002.)
As of March 31, Idenix had $34.25 million in cash and cash equivalents. Following the IPO and private placement, the company has 47.8 million shares outstanding.