By Brady Huggett
Cytovax Biotechnologies Inc. closed its initial public offering, issuing about 1.67 million shares at C$6 apiece to raise about C$10 million (US$6.5 million) for its programs in infection.
Cytovax has granted the IPO syndicate an overallotment option to purchase an additional 250,005 shares at the offering price during the period ending 60 days from the closing of the offering. The company now has about 8.1 million shares outstanding.
If the overallotment option is exercised in full, Cytovax will gross proceeds of approximately C$11.5 million from the offering. Cytovax's shares trade on the Toronto Stock Exchange under the symbol CXB.A, and they closed down C25 cents on their first day of trading Wednesday.
"We are quite excited that we were able to do the IPO in a very tough market," said Bin Huang, president and CEO of Cytovax. "Now that we have the funds and the people, we want to focus on the product."
For Cytovax, of Edmonton, Alberta, the product is Cytovaxine, a peptide vaccine to prevent Pseudomonas aeruginosa infections, which was produced through Cytovax's Anti-Adhesion Platform Technology. The product, which is finishing up preclinical work and should enter Phase I trials soon, is designed to prevent the Pseudomonas bacteria from attaching to the host cell, making it unable to replicate and therefore stopping the spread of infection.
While Cytovaxine is furthest along, Cytovax also is working on a monoclonal antibody therapeutic product, Huang said.
"These two products target two different populations," she said. "Cytovaxine targets healthy populations that are susceptible to infection. The antibody product would be for patients that already have the infection or are at immediate risk, such as patients who will undergo emergency surgery."
Cytovax had about C$8.6 million in cash in September. Huang said it is currently burning C$340,000 a month, or just over C$4 million a year. Since September, through a private placement and now the initial public offering, it has raised roughly C$18 million, money that should last two to three years, Huang said, as the company ramps up to move into the clinic. (See BioWorld Today, Nov. 6, 2000.)
"I think [the fundings] are a reflection of investor interest in our technology and investors' confidence in the management," Huang told BioWorld Today. "It really brings the company to a new stage of its life cycle and allows us to become a solid biotechnology company."
While Cytovax is focused on battling bacteria in people, it realizes its technology perhaps has uses yet untapped.
"Our technology might have other applications," Huang said. "Such as nonhuman or veterinary. But anything outside of humans would not be a priority at this time. Any of those applications we would like to partner or license out."
In October, Cytovax hired a full-time chief financial officer and, in November, brought on board a vice president of research and development. The company stands at 23 employees now, but Huang said it is expecting to add another three to five employees to the payroll as soon as it gets the candidates, most likely in a month or two.
"It's exciting," she said. "Going public means we have better access to capital and to senior management and human resources. We are hiring now. I think overall we have become a much more solid company because of the people we have in place and the science that has been here for years. Now we have the means to bring it all forward." n