About a year after declaring its plan to cut back on gene therapy efforts to focus on cancer vaccines and oncolytic virus therapies, Cell Genesys Inc. said it priced a public offering of 4.25 million shares of common stock at $12.50 per share, raising gross proceeds of about $53.1 million.
The company's stock (NASDAQ:CEGE) ended Tuesday at $13.05, the day before the pricing was disclosed. It fell 18 cents Wednesday to close at $12.87.
Expected to close March 22, the offering is being made pursuant to a shelf registration statement that became effective in February and includes an option for underwriters to buy 637,5000 more shares to cover overallotments.
Jennifer Cook Williams, director of corporate communications and investor relations for South San Francisco-based Cell Genesys, said the company could not comment due to quiet-period rules.
The money comes just in time to help with Phase III trials of the GVAX cancer vaccine in prostate and lung cancer, which the company has said it plans to begin this year.
GVAX vaccines are made of tumor cells irradiated and genetically modified to secrete granulocyte macrophage colony-stimulating factor. The tumor cells, irradiated for safety, are used to vaccinate patients to stimulate immune responses against tumors. Cell Genesys has all rights to the GVAX portfolio, since a deal with Tokyo-based Japan Tobacco Inc. for the lung cancer indication ended about a year and a half ago. (See BioWorld Today, Oct. 21, 2002.)
The GVAX cancer vaccines are in Phase II studies for prostate, lung and pancreatic cancer, as well as leukemia, and in Phase I/II studies for multiple myeloma.
In oncolytic virus therapies, a Phase I/II study of CG7870 plus radiation therapy for early stage prostate cancer is under way. Others are in the preclinical stages, as are some anti-angiogenesis experiments against cancer. Last summer, Cell Genesys entered a $28.5 million deal with Basel, Switzerland-based Novartis AG to develop oncolytic virus products. (See BioWorld Today, July 23, 2003.)
Cell Genesys' majority-owned subsidiary, San Diego-based Ceregene Inc., is still working in gene therapy, focused on neurological disorders. Cell Genesys also owns about 7.7 million shares of common stock of its former subsidiary, Abgenix Inc., the antibody expert based in Fremont, Calif.
In its most recent quarterly financial report, Cell Genesys said it had about $58.7 million in cash as of Sept. 30 and about $60.1 million in short-term investments.
JPMorgan and Lehman Brothers Inc. are acting as joint book-running managers in the offering, with Needham & Co. and SG Cowen Securities Corp. serving as co-managers. All are New York-based.