By Brady Huggett
After doubling its human resources, expanding clinically and swallowing two companies, Antigenics Inc. is readying a $50 million offer of newly issued convertible preferred stock represented by depositary shares.
The offer is meant to give fiscal strength to the company that has had to loosen its belt in the past 12 months.
¿It shores up our balance sheet a little more and makes us comfortable,¿ said Garo Armen, CEO and chairman of Antigenics. ¿We have a fair amount of cash now, but with the expansion we¿ve had in our company, [Antigenics] requires a bit stronger balance sheet and that is what we are doing.¿
Armen said New York-based Antigenics has increased its number of employees twofold to 195; has 30 clinical trials under way ¿ nine are partnered ¿ compared to just five last year; has nine products in the clinic vs. one sole product last year; and has acquired both Aquila Biopharmaceuticals Inc. and Aronex Pharmaceuticals Inc. in the past year. So while he said Antigenics doesn¿t need the money tomorrow, it¿s nice to have it around. (See BioWorld Today, Aug. 22, 2000, and April 25, 2001.)
¿We closed [2000] with $100 million in cash,¿ he said. ¿The estimate by analysts for our burn this year is $25 million, so if you believe analysts, we should close the year with $75 million in cash.¿
Armen would not discuss the terms of the convertible preferred stock, saying only that these sorts of transactions have ¿the typical premium to the common [stock].¿ Antigenics has about 29.5 million shares outstanding, Armen added, and is scheduled to release its second-quarter figures July 25.
The acquisition of The Woodlands, Texas-based Aronex, originally announced in April, closed Thursday. By ingesting Aronex, Antigenics absorbed four oncology products to add to its arsenal, including the twice-denied liposomal formulation of all-trans-retinoic acid, Atragen, for patients with acute promyelocytic leukemia. Antigenics has been in discussions with the FDA concerning ways to achieve approval.
¿We met with the FDA subsequent to the rejection of the product and are eager to work with them,¿ Armen said. ¿We expect a filing in the first half of next year with a potential launch in the second half of next year.¿
The antifungal product Nyotran also came to Antigenics courtesy of the Aronex acquisition. The drug is in a Phase III trial and Armen said the study should be completed in the first half of next year with a likely second-half filing to follow, giving Antigenics the expectation of two new drug applications in 2002.
Oncophage, Antigenics¿ own personalized cancer vaccine, is in a Phase III study for kidney cancer. Armen said the company plans to initiate four additional pivotal trials this year, one in melanoma and three other kidney cancer trials.
¿Any of those five trials will be structured to yield a commercial product by 2003 or 2004,¿ Armen said.
With so much activity, it won¿t be difficult to find a use for the funds. Even so, the amount and vehicle for the financing were carefully chosen, Armen said.
¿We are doing a modest-size [financing] because our equity, in our opinion, is depressed and the convertible deals are always more expensive than you would like them to be,¿ he said. ¿We wouldn¿t have wanted to sell shares below the IPO price anyway, and this puts us above the band of the IPO price.¿
Antigenics¿ stock (NASDAQ:AGEN) rose 29 cents Friday to close at $17.70. It raised $63 million in its initial public offering in February 2000, selling shares at $18 apiece. (See BioWorld Today, Feb. 7, 2000.)