BioWorld International Correspondent
LONDON The 18-month drought in biotechnology IPOs in the UK could come to an end with the announcement from Ark Therapeutics Group plc that it is joining the London Stock Exchange.
The company said it expects to raise £30 million to £40 million (US$43 million to US$57 million) in the placing, which is being handled by WestLB Panmure Ltd. and Nomura International.
Paul Higham, commercial director at Ark, told BioWorld International, “We are optimistic of success because of the strength of our story. We are unusual for a company at our stage of development because we have a lot of products in the pipeline. The technology wave of 2000 is over; investors are looking for products.”
Ark will be the first company to get a full listing since Genetix plc floated in November 2000, although Neutec Pharma raised £9 million when it joined the Alternative Investment Market, London’s junior market, in February. Other biotechnology companies have said they want to list and are hoping that Ark’s move will open up the IPO market.
Ark has three areas of specialization gene therapy, drug targeting and vascular diseases and expects its lead product, EG006, for the treatment of cancer cachexia, to reach the market in 2004. The compound is an existing registered agent in a new indication and has FDA fast-track designation. It is currently in Phase III trials in the U.S. and Higham said the new drug application is likely to be filed early in 2003.
Another product, EG004, to prevent blood vessels from blocking after vascular graft surgery for hemodialysis, is about to enter Phase II/III trials, while EG009, for the treatment of glioma, is in Phase IIb. It is part of Ark’s strategy to target indications in which orphan drug or fast-track designation is likely, and both compounds have orphan status.
The company also has EG005 for the treatment of lipodystrophy, a fat metabolism disorder associated with some HIV therapies; EG008, a dressing device for leg ulcers; and EG001, a biodegradable collar device placed around blood vessels for local delivery of therapeutic agents.
Ark, based in London, plans to fund the clinical development of those products through approval and to market the majority of them using its own sales force.
Higham said the funds raised in the IPO will be sufficient to see the company through the launch of its first product and profitability.
The company also has a broad preclinical pipeline, including a drug-targeting platform, Scavidin, for delivering agents to a particular therapeutic site, a gene vector and expression program, and expertise in growth factors.
Ark raised £14.5 million in August in its third round, increasing cash reserves at that point to £25 million. The money came from existing investors BankInvest of Denmark, Merlin Biosciences, Nomura International, Biofund and TVM.
“It helps when we are talking about the IPO that investors know we are not coming to the market because we are under financial pressure,” Higham said.
The company raised £3 million when it was founded, and £15 million in April 2000. In January 2001 it took over OY Quattrogene Ltd., of Kuopio, Finland, in an all-share deal, and at the same time changed its name from Eurogene Ltd. to Ark.