By Matthew Willett
Canadian peptide producers Theratechnologies Inc. plans to take its subsidiary, Andromed Inc., which it jointly owns with SGF Sante Inc., to the Montreal Stock Exchange through a public offering valued at C$7 million (US$4.51 million).
Andromed will offer more than 2.22 million units at C$2.25 apiece. Each unit is comprised of one share and half a warrant. One warrant would be redeemable for one share at $2.50 until June 30, 2002. Andromed was founded in 1997.
Separately, Theratechnologies, headquartered in Saint-Laurent, Quebec, and SGF Sante Inc., a subsidiary of the Societe General de Financement du Quebec, also of Quebec, will invest C$1 million each in Andromed. After the offering both companies' interest in Andromed will be reduced from 50 percent to 39 percent.
Theratechnologies CEO Luc Tanguay said Andromed's float could be a challenge in the choppy IPO seas of late, but that the company has more than a few things counting in its favor.
"I think it's a case-by-case scenario," Tanguay told BioWorld Today. "We really want the company to be successful in business and in the capital market. Even though pricing is important, we're not that sensitive to the final pricing. Five or 10 percent won't affect our decision to go, first, because we want to be successful and secondly, because we're participating in the financing on the same terms as the public. If investors think it's a good story in the medium term, and it has good pricing, I think it could have investors for that."
Tanguay added that tax incentives in Canada related to buying into the health sector are beneficial to the IPO.
And, he said, the relatively small size of the offering, roughly half to a quarter of the size of a typical Canadian biotechnology company's offering, will make closing the offering easier. "It's not a big issue, also," he said. "You don't need a very hot market for that."
Andromed, which pioneered and marketed the first electronic stethoscope, will use proceeds from the offering and placement for equipment acquisition, research and development and marketing expenses.
The stethoscope is marketed through a commercialization agreement with Agilent Technologies Inc., of Palo Alto, Calif.
The company focuses on medical devices, but also markets software. Its data gathering and analysis software, Sequs, is a computerized tool for the development of surveys among health care service users.
Meanwhile, Theratechnologies will concentrate on its pipeline and future growth. Its lead compound, a ThGRF peptide, which is a growth hormone-releasing factor analogue, is aimed at treating muscle wasting, hip fractures and sleep disorders.
Its second program is an ex vivo photodynamic cell therapy system for the treatment of bone marrow cancers, graft-vs.-host disease and certain autoimmune disorders.
In the end, he said, increasing value through the fund raising for Andromed will make both companies more valuable.
"Eventually, we'd like this company to be able to list on a bigger exchange like the Toronto Stock Exchange, and maybe one day the Nasdaq," Tanguay said. "The value in two years of both companies, compared to if we had kept Andromed - I think it will be much higher, simply because of the amount of cash we'll be able to raise in that exercise and the growth that will allow for Andromed."
Theratechnologies' stock (TSE:TH) closed Wednesday at C$10.99, up C4 cents. n