Dynavax Corp. priced its initial public offering on Thursday, raising $45 million - half of what it hoped to raise when it first filed.
The Berkeley, Calif.-based company priced 6 million shares at $7.50 each. About a month ago, the company had set its price range at $12 to $14.
It is the fifth biotech IPO this year, and the second one to price below its expected range. South San Francisco-based Renovis Inc. raised $66 million earlier this month when it priced 5.5 million shares at $12 each, below its expected range of $13 to $15.
But pricing below an expected range does not always matter to a company that needs money, said Brian Rye, an analyst with Janney Montgomery Scott LLC in Philadelphia. IPOs conducted "at rates and prices that may be below the range still represent a very nice opportunity for the company to get some much-needed capital," Rye told BioWorld Today.
Dynavax began trading on Nasdaq under the symbol "DVAX." The stock closed Thursday at $9.40 - up 25.3 percent, or $1.90. The company had filed for a $75 million IPO in December 2000, but withdrew it in April 2001.
In its prospectus filed last October, the company said it intends to use proceeds from the IPO for the continued development of its clinical and preclinical programs. It also plans to use them for general corporate purposes and possibly to enter into strategic collaborations. The company also said it would make a one-time cash payment to the University of California upon IPO completion.
Dynavax, which remained in an SEC-imposed quiet period on Thursday, has various license agreements with the Regents of the University of California relating to its immunostimulatory sequences, thiazolopyrimidines DNA-vaccination technologies and its product candidates.
In addition to Dynavax and Renovis, three other companies have gone public on the U.S. markets this year: Eyetech Pharmaceuticals Inc., of New York; GTx Inc., of Memphis, Tenn.; and Corgentech Inc., of South San Francisco.
A total of nine biotech companies went public on the U.S. markets in 2003. The first IPO of the year was conducted in September.
"Certainly relative to where things were this time last year, I think it's fair to say that the window has opened slightly and some companies have taken advantage of that," Rye said.
According to BioWorld Snapshots, biotech IPOs over recent years went from a high of 68 conducted in the U.S. in 2000 to a low of four conducted in 2002.
"I don't think it's fair to say that the IPO window is wide open and anyone can just come through," Rye said. "The market is being fairly discriminating. Even though the economy is definitely improving, I think there's still some nervousness out there and some caution by investors."
Dynavax filed for its IPO in October, aiming to raise $90 million. (See BioWorld Today, Oct. 28, 2003.)
The company focuses on products to treat and prevent allergies, infectious diseases and chronic inflammatory diseases. Its clinical programs are based on immunostimulatory sequences, or ISS, which are short DNA sequences that re-program the immune system's response to infectious pathogens, controlling chronic inflammation and fighting disease.
The company expects to begin Phase III trials for two ISS-based products this year: AIC for ragweed allergy and a hepatitis B virus vaccine. A third product for asthma is in early Phase II trials.
Dynavax plans to begin enrolling patients for the Phase III trial of AIC this quarter. Phase I and Phase II data showed it was well tolerated and demonstrated clinical improvement.
Earlier this month, the company granted an exclusive worldwide license to its ragweed and grass allergy immunotherapy programs to UCB Pharma, the pharmaceuticals division of UCB Group, of Brussels, Belgium. UCB is funding research and development of the programs and costs related to regulatory filings and potential product launch, sales and marketing. Dynavax, which would receive royalties, retained an option to co-promote approved products in the U.S. under certain circumstances.
Later this year, Dynavax plans to begin a Phase III trial of its hepatitis B vaccine outside of the U.S. Phase I and Phase II data of the vaccine showed it induced more rapid immunity with fewer immunizations compared to currently available vaccines. The company plans to commercialize the vaccine only outside of the U.S.
In October, Dynavax gained worldwide, nonexclusive rights to a hepatitis B surface antigen from Berna Biotech, of Bern, Switzerland, for use in its Phase III hepatitis B vaccine trials. Berna holds an exclusive right to commercialize the hepatitis B vaccine, but it might opt out of that right. Dynavax plans to conduct most of the Phase III trials in Asia through its new subsidiary, Dynavax Asia Pte. Ltd., which was formed in October.
In addition to its two lead candidates, the company's inhaled asthma product is in a pilot Phase II trial and was shown in earlier studies to be well tolerated. Dynavax believes it might offer long-term relief following a single course of administration, while current treatments require chronic use.
Dynavax also has an ISS-based cancer therapeutic in Phase I trials, as well as preclinical candidates targeting allergies and infections. And it is developing drugs based on small-molecule thiazolopyrimidines, or TZPs, to treat certain chronic inflammatory diseases.
As of Sept. 30, the company had $17.5 million in cash and about 17.6 million shares outstanding.