By Brady Huggett
Protarga Inc. filed for its initial public offering, looking for its fatty acid vector technology to generate up to a proposed $75 million in public interest.
King of Prussia, Pa.-based Protarga¿s Targaceutical platform technology is used to create new small-molecule drugs designed to enhance the safety and efficacy of known pharmaceutical agents by chemically linking a fatty acid molecule to pharmaceutical agents. The resulting fatty acid conjugate is called a Targaceutical drug.
¿We are focused on using a fatty acid-based technology to improve pharmaceutical agents,¿ said Robert Dickey, chief financial officer at Protarga. ¿The thrust of the company¿s product development activities is, first, oncology, second, [central nervous system disorders] and third, infectious diseases.¿
The company estimated its IPO take to be $75 million in its prospectus and is proposing the ticker symbol PRTG. At the time of filing, the company had a cash position of about $16 million.
Protarga said in its prospectus it intends to use proceeds for further development of its lead product, Taxoprexin, as well as ongoing research and development activities, including preclinical evaluation and clinical studies of other compounds, business development, including product licensing and potential acquisitions, and general corporate purposes. Also, it suggested it may use the funds for potential acquisitions, although it stated it had no concrete agreements regarding such action.
Taxoprexin is being tested in a range of Phase II cancer trials. DHA-paclitaxel, the active ingredient in Taxoprexin, is a synthetic small molecule made by linking the chemotherapeutic agent paclitaxel to the natural fatty acid docosahexaenoic acid. Rounding out its pipeline, Protarga has five other compounds in preclinical oncology studies and one preclinical compound in the central nervous system area.
Protarga has its name linked to the National Cancer Institute, of Bethesda, Md., through a research and development agreement signed in April 2000. The arrangement calls for the institute to supply anticancer agents to Protarga, for Protarga to chemically link the agents to fatty acid vectors, and then for NCI to conduct preclinical studies with the resulting compounds. Protarga holds exclusive rights to license patents resulting from the collaboration. (See BioWorld Today, April 28, 2000.)
As far as going public is concerned, Dickey said the filing is really about being at the start of the curve.
¿We are subject to the market like everyone else and we are relying on the advice of our underwriters,¿ he told BioWorld Today. ¿When the window does open, we want to be in the position to be at the beginning of that, rather than not. We are filing with sufficient resources, as far as cash. We aren¿t counting on the market being open, so we will see what happens next year.¿
Underwriters for the offering are UBS Warburg LLC, of New York, and U.S. Bancorp Piper Jaffray Inc., of Minneapolis.
Nigel Webb, Protarga¿s CEO, is the largest shareholder in the company, with 17.4 percent. Other significant shareholders are Koerner Capital Corp., with 14.3 percent; Shashoua Voting Trust, with 11.1 percent; and EquityFourLife Ltd., with 7.3 percent.