Five public offerings in less than two weeks places 2004 more than a month ahead of last year in terms of follow-on funds raised. The two newest offerings on Tuesday benefited Antigenics Inc., which raised $52.5 million, and Onyx Pharmaceuticals Inc., which raised $156.5 million.
Add those to money raised from three other companies - NeoPharm Inc., of Lake Forest, Ill., and Seattle-based Targeted Genetics Corp. and Dendreon Corp. - and the industry has raised in five weeks this year what it raised last year in twice the time. (See BioWorld Today, Jan. 23, 2003; Jan. 28, 2003; and Feb. 3, 2004.)
It wasn't until mid-March last year that the industry had raised more than the $443.88 million in U.S. public follow-on offerings it has raised so far this year.
Antigenics Offering Expected To Support Oncophage
New York-based Antigenics sold 5 million shares at $10.50 per share, raising a total of $52.5 million. The company is expected to use proceeds to build a commercial infrastructure for its lead cancer product, Oncophage, as well as to advance other clinical and preclinical programs.
"We're getting close to product commercialization," said Garo Armen, chairman and CEO of Antigenics. "We need the appropriate funds to build a strong company with not only a strong development arm, but also a strong commercialization arm."
Oncophage, a vaccine in Phase III trials for renal-cell carcinoma and metastatic melanoma, could produce enough data by late this year for the company to file a new drug application.
"If all goes well, it's conceivable that we will have the product ready to commercialize sometime toward the end of 2005," Armen told BioWorld Today. "It's a very exciting product in the sense that it's certainly applicable to all cancer types. Its side effect profile looks excellent so far. It's one of very few products in the field of oncology with a blockbuster potential."
Underwriters of the public offering are New York-based companies UBS Investment Bank as the lead, and Needham & Co. Inc. and Ryan Beck & Co. Inc. as co-managers. Antigenics granted the underwriters an overallotment option of 750,000 shares.
The company will have 44.5 million shares outstanding following the offering. Antigenics stock (NASDAQ:AGEN) fell 6 cents Tuesday to close at $10.76.
The company anticipates its net proceeds will be about $49.5 million, not including the overallotment option. In addition to its development programs, the company might use the funds for working capital, licenses and acquisitions of complementary technologies and products.
Antigenics also focuses on products to treat infectious diseases and autoimmune disorders. Lead products in addition to Oncophage are AG-858, a cancer vaccine in a Phase II trial for chronic myelogenous leukemia (CML); AG-702, a vaccine in Phase I for genital herpes; and Aroplatin, a liposomal formulation of a third-generation platinum chemotherapeutic.
Oncophage uses heat-shock protein technology to stimulate a T-cell-based immune response to target and kill cancer cells. AG-858, AG-702 and AG-707 also are based on heat-shock proteins. The proteins occur naturally and can function as a transport of a person's cancer. Antigenics manufactures Oncophage from a patient's surgically removed tumor.
About 700 patients have been treated with Oncophage, which has fast-track and orphan drug designations from the FDA for renal-cell carcinoma and metastatic melanoma.
If the product shows efficacy, Armen said Oncophage would "improve care dramatically for patients stricken with cancer."
The company might begin two more Phase III trials this year in renal-cell carcinoma in melanoma, he said, and it plans to begin a Phase I/II trial in lung cancer and a Phase II trial in breast cancer later this year.
In November, the FDA lifted a partial clinical hold on the two Oncophage Phase III trials that was imposed 13 weeks earlier due to concerns regarding the product characterization. (See BioWorld Today, Nov. 25, 2003.)
AG-858 showed in a pilot trial that 11 out of 17 patients experienced a reduction in levels of cytogenetic or molecular disease burden. The company began a Phase II trial last year in CML and should complete enrollment this year, Armen said.
AG-702 and AG-707 represent the company's heat-shock protein vaccine program to treat genital herpes. The company began enrolling patients in a Phase I trial of AG-702 in 2001 with enrollment completion expected early this year. It also expects to file an investigational new drug application for AG-707 to begin a Phase I trial in genital herpes during the first half of this year.
Antigenics does not intend to initiate any clinical trials this year to study Aroplatin. Instead, it will work in the preclinical setting to improve the drug's formulation.
"We are eager to fine-tune our strategy," Armen said, "of how we will move into the development of Aroplatin, which includes perfecting the formulations and defining the strategy of which combination we need to use it in, in order to optimize the utility of this product."
Onyx Raises $156.5M For Clinical Development
Onyx Pharmaceuticals, of Richmond, Calif., raised $156.5 million in its public offering of about 4.6 million shares priced at $33.75 per share. The underwriters - Morgan Stanley & Co. Inc., SG Cowen Securities Corp. and Leerink Swann & Co., all of New York, and Minneapolis-based U.S. Bancorp Piper Jaffray & Co. - have an overallotment option for up to 695,550 shares. Morgan Stanley is the sole bookrunner for the offering.
The company will have 34.2 million shares outstanding following the offering. Onyx's stock (NASDAQ:ONXX) fell 87 cents Tuesday to close at $33.75.
While the company could not comment due to an SEC-imposed quiet period, it stated in its prospectus it expects to receive about $146.6 million in net proceeds, not including the overallotment option. The company plans to use the money to fund development activities, including clinical trials for BAY 43-9006, regulatory and commercialization activities, general administrative support and general corporate purposes.
Onyx is focused on developing therapies that target the molecular mechanisms that cause cancer. It is developing, along with its collaborators, small-molecule, orally available drugs to prevent cancer cell proliferation and angiogenesis by inhibiting proteins that support tumor growth. The company's lead candidate, BAY 43-9006, is in Phase III trials and is partnered with Bayer Corp., a subsidiary of Bayer AG, of Leverkusen, Germany.
BAY 43-9006 is a signal transduction inhibitor and the first small-molecule agent to enter the clinic directed against the enzyme RAF kinase to inhibit tumor cell proliferation, the company said. The drug also displays activity that inhibits two key proteins involved in angiogenesis.
In October, Bayer and Onyx initiated a pivotal Phase III trial of BAY 43-9006 in patients with advanced renal-cell carcinoma. (See BioWorld Today, Oct. 28, 2003.)
Phase II data showed tumor shrinkage and disease stabilization in the disease. The drug also is being studied in two Phase II trials to treat kidney, melanoma, liver and other cancers, and in Phase Ib trials studying it in combination with standard chemotherapy drugs. The companies also are conducting a Phase I trial in Canada in patients with acute myelogenous leukemia and myelodysplastic syndrome.
As part of its agreement with Bayer, Onyx funds 50 percent of the development costs for the product everywhere except Japan, where Bayer is funding all product development. If the product is approved, the companies will co-market it in the U.S. and share all profits equally.
So far, Onyx has received $20 million in milestone payments. The payments will be reimbursed to Bayer from any future profits and royalties to Onyx.
Aside from the company's lead product, Onyx is working in collaboration with Warner-Lambert Co., a subsidiary of New York-based Pfizer Inc., to find compounds that modulate the activity of key enzymes that regulate the cell cycle. Warner-Lambert plans to move a small-molecule cell cycle inhibitor targeting cyclin-dependent kinase into a Phase I trial this year.