If there is a textbook formula for when to conduct a public offering, Pharmion Corp. might have followed it to the letter on Thursday, raising $220.8 million just six weeks after receiving FDA approval for Vidaza.
The company's stock has steadily risen since that May day, from about $27 to almost $50. Investors participating in the public offering appeared to get a fair price at $48 per share. The stock (NASDAQ:PHRM) rose $3.42 Thursday to close at an all-time high of $52.34.
Boulder, Colo.-based Pharmion agreed to sell 4.6 million shares, increasing the offering by 15 percent to meet the demand of investors.
"Obviously it's a very significant financing for us," said Patrick Mahaffy, president and CEO of Pharmion. "We were grateful for the support we received from existing and new shareholders."
The company is offering underwriters a bite at another 690,000 shares to cover overallotments. The underwriters include New York-based Morgan Stanley & Co. Inc. as bookrunner and lead manager. San Francisco-based Pacific Growth Equities LLC and New York-based firms JP Morgan Securities Inc. and Bear, Stearns & Co. Inc. acted as co-managers.
"We intend to use the proceeds to support further development and launch for Vidaza," Mahaffy told BioWorld Today, "but it does provide a resource for additional licensing of hematology and oncology products."
The company's prospectus said net proceeds also would cover clinical studies for ongoing development of Vidaza and Thalidomide, as well as working capital and money for other general corporate purposes, such as in-licensing products.
Pharmion received full FDA approval of Vidaza for five subtypes of myelodysplastic syndromes, causing its stock to soar 47.8 percent. Vidaza, which was in-licensed from Pharmacia & Upjohn Co., now part of New York-based Pfizer Inc., is an orphan drug that belongs to a class of hypomethylating or demethylating agents believed to work by restoring normal growth and differentiation of bone marrow cells. (See BioWorld Today, May 21, 2004.)
The company launched the product Thursday, said Anna Sussman, the company's director of investor relations and corporate communications. Pharmion, which has built a 75-person sales force, holds worldwide rights to Vidaza and anticipates submitting a marketing authorization application in Europe and Australia later this year.
Pharmion went public in November, raising $84 million through the sale of 6 million shares at $14 each. The stock has more than tripled in just seven months. (See BioWorld Today, Nov. 7, 2003.)
Pharmion in-licensed Thalidomide Pharmion 50 mg (thalidomide) from Celgene Corp., of Warren, N.J., and Penn T Ltd. for all countries outside of North America, Japan, China, Taiwan and Korea. In June 2003, the company began selling thalidomide on a compassionate-use basis in Europe while it sought full regulatory approval as a treatment for relapsed and refractory multiple myeloma (MM). The product had $12.6 million in sales in the first quarter. Pharmion, however, withdrew its European application in May in order to resubmit it sometime next year with additional data from studies in relapsed and refractory, as well as newly diagnosed MM patients. The product is approved in Australia, New Zealand and Turkey, as well as in the U.S., where Celgene markets it for erythema nodosum leprosum. With expected U.S. sales between $285 million and $295 million this year, the product is believed to be used off label for MM, Sussman said.
Pharmion's two other in-licensed products are Innohep (tinzaparin), a low-molecular-weight heparin approved in the U.S. for deep-vein thrombosis, and Refludan (lepirudin), an antithrombin agent approved in the U.S., Europe and other countries for heparin-induced thrombocytopenia. Pharmion licensed the U.S. rights to Innohep from LEO Pharma A/S, of Ballerup, Denmark, and the worldwide rights outside of the U.S. and Canada to Refludan from Berlin-based Schering AG. The company relaunched Innohep in the fourth quarter of 2002 and used the drug to establish its U.S. sales and marketing organization. Pharmion began selling Refludan in Europe and Australia in the third quarter of 2002, establishing a sales force in those areas.
The company plans to continue to in-license late-stage and approved products to fully exploit its regulatory, sales and marketing capabilities. It has 29.9 million shares outstanding following the offering.
As of March 31, Pharmion had $43.3 million in cash and cash equivalents. It reported about $24.5 million in operating expenses in the first quarter. At that rate, this week's offering would cover more than two years of operations.