By Brady Huggett
diaDexus Inc. filed for an initial public offering with proceeds estimated to be $100 million and said in its filing it plans to move its discovery platform beyond cancer in the future.
The managing underwriters for the offering are Lehman Brothers Inc.; CIBC World Markets Corp.; Prudential Vector Healthcare Group, a unit of Prudential Securities Inc.; and Fidelity Capital Markets, all of New York. All shares are being offered by diaDexus.
The company had about $93 million in cash and cash equivalents and approximately 22.2 million primary shares outstanding on Sept. 30. diaDexus is in a quiet period and could not comment on the offering.
diaDexus, of Santa Clara, Calif., focuses on translating raw genomics data into novel diagnostic and therapeutic products. It was formed in 1997 by SmithKline Beecham plc, of London, and Incyte Pharmaceuticals Inc., of Palo Alto, Calif. SmithKline owns about 4.7 million shares of diaDexus stock before the offering, or about 21 percent, and Incyte owns 4.4 million, about 20 percent. A group of eight directors and officers own just over 11 million shares, more than 49 percent. (See BioWorld Today, Sept. 4, 1997.)
Having such knowledgeable parents makes the growing process easier. Under the terms of its formation, diaDexus scientists are able to draw from Incyte databases directly. SmithKline's bioinformatics researchers have access to the database of gene sequences of Human Genome Sciences Inc., of Rockville, Md., through a 1993 alliance.
Diagnostics discovered under SmithKline's rights to that database are contributed on a product-by-product basis to diaDexus.
In April, diaDexus raised about $102 million through a Series C private placement of preferred stock. Following that financing, it said it was branching into drug-resistant infection and microbial disease. (See BioWorld Today, April 12, 2000.)
In its filing, it said that while it initially focused on the discovery of novel molecular targets in cancer, it expects to extend its discovery platform into other diseases. It has identified thousands of disease-associated molecular targets, evaluated more than 200 potential molecular targets using bioMVP - its target validation process - and advanced over 40 product candidates into development. It has two diagnostic product candidates in late-stage preclinical development and is seeking patent protection on its discoveries.
The company recently expanded into therapeutics and will focus initially on therapeutic monoclonal antibodies and later plans to discover and develop therapeutic vaccines. In the filing, diaDexus said a significant portion of proceeds from the IPO will be used to establish discovery, validation and product development efforts for therapeutic candidates.
It lists a main competitor as Millennium Pharmaceuticals Inc., of Cambridge, Mass., through its Predictive Medicine division. Also, large companies like Abbott Laboratories Inc., of Abbott Park, Ill.; Bayer AG, of Leverkusen, Germany; and Roche Holdings Ltd., of Basel, Switzerland, have in-house programs that focus on discovery of molecular targets.
diaDexus has suggested the Nasdaq ticker symbol DDXS.