By Randall Osborne
West Coast Editor
Talk about a ¿holly jolly Christmas¿: Transkaryotic Therapies Inc. ¿ fresh from a court victory over its enzyme replacement drug, and from a $109 million public offering ¿ raised another $42 million in an offering of 1 million shares at $42 each.
¿It was a shelf registration, and [TKT] pulled down another million shares,¿ said Thomas Dietz, analyst with Pacific Growth Equities Inc., of San Francisco, which was a co-manager of the offering with Leerink Swann & Co., of Boston. The shelf registration was filed about a year ago. (See BioWorld Today, Dec. 15, 2000.)
The Cambridge, Mass.-based company said it will use the proceeds for general purposes, including bigger manufacturing capabilities and expanded clinical trials. The cash also will go toward preclinical testing and other research and development programs, as well as sales and marketing capabilities for TKT¿s Niche Protein products.
¿People realize [the company has] differentiating products, they¿re not me-toos,¿¿ Dietz said. ¿[TKT] can make a product and get it approved and sell it, like they did in Europe.¿ Investor enthusiasm, he added, is built on the company¿s platform for making proteins, but the firm¿s focus on rare disorders is powerfully appealing, too.
The offering comes just after TKT disclosed completion of a follow-on fund-raising that gained the company $125.58 million, with 3.22 million shares sold at $39 per share, including 420,000 shares to cover overallotments. At the same time, TKT said a federal judge dismissed patent litigation brought against TKT by Cambridge, Mass.-based Genzyme General over Replagal (agalsidase alfa), the former¿s enzyme replacement therapy developed for the treatment of Fabry disease. Genzyme¿s potentially competing drug candidate is Fabrazyme (agalsidase beta). Replagal already is approved in Europe. (See BioWorld Today, Dec. 18, 2000.)
TKT also has Niche Protein programs in Hunter syndrome, Hurlers/Scheie syndrome and Gaucher¿s disease, which, like Fabry diseases, are lysosomal storage disorders.
Joint book-running managers for the latest offering were SG Cowen Securities Corp., of Boston, and Deutsche Banc Alex. Brown, of New York.
Although his firm is involved with TKT, Dietz noted, he has maintained clarity about the firm.
¿The overriding theme for [TKT] two years ago was the Amgen lawsuit over [TKT¿s erythropoetin product candidate for anemia, Dynepo],¿ he said. Amgen Inc., of Thousand Oaks, Calif., won in a U.S. court over TKT and partner Aventis Pharma AG, of Frankfurt, Germany. In April, a court in the UK also sided with Kirin-Amgen, the Japanese affiliate of Amgen, in a fight over the European patent. (See BioWorld Today, Jan. 23, 2001, and April 12, 2001.)
TKT¿s battle ¿distracted a lot of people, and kept them out of the story,¿ he added. ¿That overhang is no longer there. There¿s no more bad news expected.¿
The Dynepo case ¿comes up for appeal in 2002,¿ Dietz told BioWorld Today. ¿I think TKT is going to walk away victorious and, if they win, they¿ll launch that year, is my expectation. The patent there expires in 2003 anyway, so TKT is going to end up with an EPO drug on the market [in Europe].¿
TKT¿s stock (NASDAQ:TKTX) closed Thursday at $42.05, down $1.10.