BioWorld International Correspondent
LONDON - Cyclacel Group plc announced a dual listing on Nasdaq and the London Stock Exchange seeking £26.6 million (US$48 million) to charge development of the lead compound from its orally available cyclin dependent kinase inhibitor program in a bid to be first to market.
Spiro Rombotis, CEO, told BioWorld International: "We have a unique opportunity to be first to market. We were No. 2 until February when Aventis terminated its own drug in the class. We have now got a clear shot on goal. Bristol-Myers Squibb and AstraZeneca are hot on our heels and we may lose the opportunity. There are huge rewards if we win the race."
That has inspired Cyclacel to go ahead with a public offering despite the uncertain market. The Dundee-based company is offering 16 million new shares, representing about 26 percent of the enlarged share capital at £1.52 to £1.80 per share, in London, or $11 to $13 per American depository share (with each ADS representing four shares). If the IPO is successful, Cyclacel would have raised $171 million since its formation in 1996 and have a valuation of $212 million.
Cyclacel raised £21.3 million in January and £34 million in June 2001. Rombotis said pitching the amount raised in the IPO in the middle of those figures is a reflection of the current market.
"There is a certain market situation out there and if you ignore it, you won't [be able to] do an IPO," he said.
He added that the company decided to go for a dual listing despite the added complication and drain on management time, because it reinforces Cyclacel's ambition to be a global company. "Yes, it is a lot more complicated, but we are a worldwide enterprise with trials running in the U.S. and Europe," he said. "We have nine drug programs that are all No. 1 or No. 2 in their respective markets. We are globally competitive in our science; we have to be globally competitive in our investor base."
Cyclacel's roster of shareholders is 40-strong, with 20 large institutional investors.
Rombotis is not deterred by the recent performance of U.S. and European companies that have seen their share prices fall post-flotation.
"In this market it is each company for itself, and on its own merits," he said.
The fund raising in January gave Cyclacel resources for two years at its existing burn rate. If it completes the IPO the company would have £40 million cash, and with the proposed increase in burn rate, that would last for three years. It is planned to spend half of the new money on boosting development of the two programs in the clinic, CYC202 and CYC698.
The most advanced of those, CYC202, is in a number of Phase IIa trials, in combination with standard chemotherapy. It is the only orally available cyclin dependent kinase (CDK) inhibitor to have reached that stage of clinical development.
There are several CDK enzymes, but CYC202 is a CDK2 specific inhibitor and Cyclacel believes that is the key target for initiating apoptosis. In the Phase I program, 78 subjects received CYC202 without any major side effects. The Phase IIa program began in January 2003, and Rombotis said the first of those, in lung cancer, is on track to report in the fall. The second, in B-cell lymphoma, is scheduled for the end of 2004.
CYC682, a nucleoside analogue drug that targets a different cell cycle mechanism, has completed a Phase I trial in 87 cancer patients. It is now in a second Phase I and due to enter Phase II mid-2005. The next two programs, against cancer and AIDS, target other aspects of the cell cycle and will enter clinical development in a year's time.
The commercialization strategy is to find a licensee at the end of Phase II, when Rombotis said, "Pharma is prepared to write big checks." One possibility is that CYC202 would be out-licensed in the larger indication of lung cancer, and Cyclacel would keep it in the smaller market of B-cell lymphoma.