By Debbie Strickland

Special To BioWorld Today

With a complete biologics license application filing expected by the end of the year for its lead cancer product, Ilex Oncology Inc. is seeking $51 million in a public offering of 3.2 million shares at an assumed price of $15.875 per share.

CIBC World Markets Corp., of New York, is lead underwriter. Prudential Vector Healthcare Group, of New York, and US Bancorp Piper Jaffray, of Minneapolis, are co-managers. They have an overallotment option on 525,000 shares that could boost the gross to $59 million, and the net to $55.1 million. The company's cash cushion would more than double, to $87.6 million.

A stockholder is selling an additional 300,000 shares under the prospectus, but those proceeds will not accrue to the company.

Completion of the offering would leave Ilex with 20.4 million shares outstanding.

Ilex will use the proceeds to expand clinical trials and preclinical research, and perhaps to play the acquisitions market to acquire additional technologies. The company currently has a clinical-stage cancer portfolio of seven products, the most advanced of which is Campath, an anticancer humanized monoclonal antibody initially targeted for chronic lymphocyitc leukemia. Two sections of a BLA have been submitted to the FDA, with the third and final portion expected to be submitted by the end of the year.

Ilex has developed the product through a 50-50 joint venture with LeukoSite Inc., of Cambridge, Mass. Schering AG, of Berlin, in August signed on for worldwide marketing rights (excluding Japan and East Asia) in a deal that provided the partnership $30 million in up-front cash and milestone payments, plus 67 percent of net profits.

The marketing deal followed the June release of positive data from a pivotal trial that tested Campath in 93 patients who had failed standard treatment. Thirty-one patients had a complete or partial response. The product also is undergoing Phase II trials in non-Hodgkin's lymphoma, organ transplant rejection and multiple sclerosis.

Next up in Ilex's pipeline is eflornithine, which in April entered a 400-patient Phase III trial for preventing the recurrence of superficial bladder cancer. The National Cancer Institute is co-sponsoring the trial, as well as supporting development in other non-malignant indications.

A gout product - oxypurinol - is also nearing the developmental finish line. Based on results from a compassionate use program, Ilex plans to seek accelerated marketing approval by conducting a pivotal Phase II trial in 2000 and submitting an NDA shortly thereafter.

If the public offering closes at the assumed price, it would allow the company to capitalize somewhat on recent gains that sent the stock to its 52-week high of $19.875 on Sept. 14 - an 80 percent increase for the year to date. In the wake of the offering announcement, however, the shares (NASDAQ:ILXO) were down 11 percent Monday, closing at $12.875, a $1.625 drop.

Even so, in the current hot market for biotechnology firms, the company may well do better with this financing than with a $20 million private placement completed in July, which garnered $8.37 a share for 2.4 million shares.

Ilex at that time acquired Convergence Pharmaceuticals Inc., of Boston, and its preclinical pipeline of angiogenesis inhibitors, paying $10 million in common stock, with an additional 1 million shares to be paid if two compounds reach the clinic.