National Editor

On the heels of a major deal with Bristol-Myers Squibb Co. to develop its treatment called E2F Decoy for preventing post-surgery vein-graft failure, Corgentech Inc. has registered an initial public offering to raise $86.25 million.

Neither the number of shares nor their price was specified. South San Francisco-based Corgentech applied to list on Nasdaq under the symbol "CGTK."

The company is in a quiet period as required by the Securities and Exchange Commission, but a prospectus related to the IPO said the proceeds would go for developing E2F Decoy (edifoligide sodium), preparing for its commercial launch, and other corporate purposes.

Corgentech's research is focused on transcription factor decoys, strands of DNA that specifically bind to and block the activity of their target transcription factors. Currently in two Phase III studies, the lead product, E2F Decoy, is applied to vein grafts ex vivo and causes the cells in mid-vein to lengthen and thicken like an artery in a couple of weeks.

New York-based BMS paid Corgentech $45 million in cash and equity up front in the development deal, with another $205 million possible in clinical and regulatory milestone payments. (See BioWorld Today, Oct. 14, 2003.)

BMS and Corgentech are sharing development costs in the U.S. and Europe, based on a pre-agreed percentage allocation. In the U.S., the companies would co-promote E2F Decoy and share profits, with rights in all other countries going to BMS, which would pay Corgentech a royalty on sales.

As of Sept. 30, before the BMS deal, Corgentech had $48.36 million in cash, cash equivalents and short-term investments, with a net loss of $38.7 million for the nine months ended that date, and an accumulated deficit of $77.5 million.

If development efforts for E2F Decoy fail, Corgentech notes in the prospectus, "we may never generate any revenues and may be forced to cease operations," since all other product candidates are in preclinical studies.

Underwriters for the IPO, all in New York, are Credit Suisse First Boston LLC, Lehman Brothers Inc., CIBC World Markets Corp. and U.S. Bancorp Piper Jaffray Inc.

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