PARIS - The Spanish pharmaceutical company Zeltia, of Madrid, has raised EUR181.5 million (US$172.5 million) through a public share offering on the Madrid stock exchange.

Zeltia described the operation, which closed on July 2, as the biggest ever by a biotechnology company in Europe. Trading in the shares started on July 3, and they were immediately included in the Ibex-35 index of the largest companies quoted on the Madrid exchange.

A total of 4,150,126 ordinary shares, including 3 million new shares, were sold at a price of EUR60.50 and the offer was 2.5 times oversubscribed. The operation was managed by Hong Kong Shanghai Bank Corporation (HSBC), with the Spanish institutions BSCH, B&M and Caixa Galicia acting as co-lead managers, and they have been offered an overallotment option of 650,000 shares, which they have until August 4 to exercise. If they do, Zeltia's proceeds from the operation will be swelled by a further EUR39.3 million, for a total of EUR220.8 million.

The funds were raised to enable Zeltia's biotechnology subsidiary, PharmaMar, which claims to be the world leader in the discovery and development of therapeutic compounds for the treatment of cancer derived from marine organisms, to push ahead with the clinical and industrial development of a dozen antitumor compounds, such as ET-743, Aplidina, Kahalalido F and ES-285. The company's lead compound, ET-743, originates from an ascidian called Ecteinascidia turbinata, first discovered in the Caribbean, and has demonstrated potent antitumor activity. It currently is in Phase II clinical trials for the treatment of soft tissue sarcomas, but has proved effective in treating other tumors as well. PharmaMar hopes to initiate trials in other indications later this year.

The principal investigator for the trial under way, George D. Demetri, co-director of the Dana-Farber Cancer Institute's Sarcoma and Bone Oncology Center, stressed the novelty of ET-743: "The compound interacts with the DNA in tumor cells differently from the conventional drugs used in chemotherapy. This novel mechanism of action could be responsible for the significant and continued control over the disease observed during the trials.''

PharmaMar is hoping to secure regulatory approval for ET-743 in a little more than two years, according to Zeltia's chairman, Segzn Josi Maria Fernandez-Sousa. "We think ET-743 could be on the market by the end of 2002,'' he said. "Our idea is for PharmaMar itself to market ET-743 in Europe and for the compound to be licensed out for the rest of the world to a specialist company of the first rank. To that end, we are in discussions with various companies.''

As regards Aplidina, which is obtained from the Mediterranean ascidian Aplidum albicans, it is in Phase I trials. In in vitro and in vivo studies, it showed substantial activity in many different kinds of tumors, including lymphomas, gliomas, and bladder, pancreatic, gastric, prostate, colorectal and renal cell cancer.

Following the successful share issue, the company is now proposing a share split in which one existing share would be exchanged for four new shares. Shareholders will be asked to vote on this and other proposals at an extraordinary shareholders' meeting expected to be convened in August or September, although the date will not be fixed until HSBC has decided whether to take up its greenshoe.

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