By Mary Welch
Cubist Pharmaceuticals Inc. filed to sell 2.5 million shares of stock, which at Monday¿s opening price $51.125 would gross about $128 million.
The stock (NASDAQ:CBST), however, fell $7.125 Monday, or 14 percent, to close at $44.
The proceeds would be used for several purposes, including the clinical funding and commercialization of daptomycin, and the continued support of its lipopetide drug discovery program and its VITA technology. The cash infusion will also be used for in-licensing technology or drugs, and Cubist intends to complete at least one in-licensing deal this year, according to the company¿s filing.
In addition to the 2.5 million shares, Cubist will offer the underwriters another 375,000 shares for overallotments. Robertson Stephens, of New York, is the lead managing underwriter. Co-managing the offering is Pacific Growth Equities Inc., of San Francisco, and Chase H&Q, ING Barings and Lazard Freres & Co. LLC, all of New York.
The Cambridge, Mass., company completed a $55 million private placement in January, selling 2.2 million shares. It ended 1999 with about $26 million in cash and equivalents, and following this offering expects to have two to three years of cash. Currently, there are about 23 million shares outstanding. (See BioWorld Today, Jan. 31, 2000, p. 1.)
Cubist¿s lead product is daptomycin, which is in Phase III trials for skin and soft-tissue infections and Phase IIa for bacteremia, or bloodstream infections. Enrollment of more than 1,200 patients in the Phase III trial for skin and soft-tissue infections is expected to finish by the end of the year. A new drug application filing is on track for mid-2001, the company said.
In addition, a Phase III trial of daptomycin in urinary tract infections is slated to start and finish this year. A Phase III trial for endocarditis should start this year as well.
Daptomycin is a novel anti-infective agent with potent activity against all gram-positive bacteria. It is a novel cyclic lipopetide antibiotic derived from a fermentation product of Streptomyces roseosporous. It works at the bacterial cytoplasmic membrane and disrupts multiple aspects of membrane function. In 1997, Cubist obtained the worldwide licensing rights from Eli Lilly & Co., of Indianapolis.
The company¿s lipopetide drug discovery program is based on a novel analogue of daptomycin that has enhanced properties. The company intends to select a new compound from that program this year and file an investigational new drug application next year.
The company¿s VITA technology (Validation In Vivo of Targets and Assays for Anti-Infectives) enhances the quality of leads identified by screening target assays for anti-infectives. It generates functional biology data useful for prioritizing the most valuable protein therapeutic targets from clinically important pathogens, such as Staphylococcus aureus and Escherichia coli.
The company posted year-end 1999 revenues of $5.3 million and a net loss of $17.8 million.