By Matthew Willett
Since filing for an initial public offering in November, Seattle Genetics Inc. (SGI) raised its price from a range of $10 to $12 to a range of $11 to $13, seeming ready to buck the cold capital market.
The makers of monoclonal antibodies did get its 7-million-share IPO through, but at $7 per share, for proceeds of $49 million, shy of the $75 million it aimed for initially. (See BioWorld Today, Nov. 21, 2000.)
JP Morgan Securities Inc., of New York; CIBC World Markets Corp., of New York; and Banc of America Securities LLC, of San Francisco, underwrote the offering. SGI granted underwriters the option to purchase an additional 1 million shares to cover overallotments.
The 7 million shares sold included 285,714 shares worth $2 million, purchased directly by Genentech Inc., of South San Francisco. Further, in a separate but concurrent private placement, the company sold 285,714 more shares for $2 million to Medarex Inc., of Princeton, N.J.
SGI said it will use the proceeds from the offering to fund preclinical research and development, contract manufacturing activities, clinical trial activities and other general corporate purposes.
Founded in 1997, SGI focuses on immunotoxins, antibody-based drug conjugates and naked monoclonal antibodies, programs it took when spun off from Bristol-Myers Squibb Co. (See BioWorld Today, May 7, 1998.)
SGI also uses proprietary technology called antibody-directed enzyme prodrug therapy, or ADEPT, to fuse monoclonal antibodies to an enzyme, creating a therapeutic, the company said, with potent antitumor activity that spares normal tissue.
SGI is currently testing two product candidates, SGN-15 and SGN-10, in patients with breast, colon, prostate and other cancers. Three Phase II tests are under way for SGN-15 in combination with Taxotere, and two Phase I studies are under way with SGN-10, one with the compound as a single agent and one in combination with Taxotere.
Prior to the IPO, major stakeholders in SGI included OVP Venture Partners, with 13.1 percent of the company; Cascade Investments LLC, a 12.5 percent owner; and Vulcan Ventures Inc., also 12.5 percent stakeholders. Directors and executive officers as a whole owned 58.3 percent of the company prior to the offering.
After its IPO the company has 29.19 million shares outstanding, and as of Dec. 31 it had $24 million in cash, cash equivalents and marketable securities.
Its shares (NASDAQ:SGEN) closed at $8.25 on their first day of trading Wednesday, up $1.25, or 17.86 percent, from the offering price. n