By Mary Welch
Cytogen Corp. intends to sell 6 million shares of stock, which, based on the assumed price of $9.109, would net the company about $50.9 million.
In addition, the Princeton, N.J.-based company is granting the underwriters an overallotment option of 900,000 shares. If the overallotment is fully exercised, Cytogen should realize about $58.6 million. The underwriting group is being led by Warburg Dillon Read LLC, and CIBC World Markets Corp., both of New York. After the offering, Cytogen will have 78.6 million shares outstanding. As of March 13, there were 4,519 stockholders of record.
Cytogen will use the proceeds for the continued development, manufacturing and commercialization of its proteomics technology through its wholly owned subsidiary, AxCell Biosciences Corp., as well as for research and development of additional products, including diagnostic and therapeutic products based on its prostate-specific membrane antigen (PSMA) technology.
The company believes that, before the offering, it has enough financial resources to operate through 2001.
In its year-end report, the company said it wanted to make AxCell Biosciences a profit center. AxCell researchers are charting portions of the human proteome, concentrating on specific disease pathways and adding those interactions to the inter-functional proteomic (IFP) database for drug discovery. Initial charting is concentrating on pathways related to rheumatoid arthritis and inflammation.
Cytogen intends to have IFP subscribers already signed on early this year, and to have its robotics system chart more than 200,000 protein interactions per month. It expects to have more than 1 million interactions completed by year's end. In addition, the company expects its IFP database to be of sufficient size to be able to be marketed by partner InforMax Inc., of Rockville, Md.
PSMA is found on the membranes of all prostate cells, but in an abundance on cancerous prostate cells. Last year Cytogen acquired Allendale, N.J.-based Prostagen Inc. to regain its exclusive proprietary rights for immunotherapy to PSMA. Cytogen then entered into a joint venture with Tarrytown, N.Y.-based Progenics Pharmaceuticals Inc. to develop PSMA technology for vaccine and antibody-based therapies for the treatment of prostate cancer. (See BioWorld Today, June 17, 1999, p. 1.)
The joint venture plans to begin testing an immunotherapuetic vaccine for prostate cancer, and to explore the use of radiolabeled antibodies to PSMA to treat it. Both of these approaches may have broad application in other forms of cancers that express PSMA in the new blood vessels that support tumor growth. Among these cancer forms might be metastases of lung and breast, the company said.
As of Dec. 31, the company had $12.4 million in cash. Revenues for the year were $11.2 million, with a net loss of $13.1 million.
Cytogen's stock (NASDAQ:CYTO) closed Wednesday at $7.875, down 93.75 cents.