By Mary Welch
Oncolytics Biotech Inc., a subsidiary of Synsorb Biotech Inc., filed preliminary papers to raise $2.7 million (C$4 million) through an initial public offering on the Alberta Stock Exchange.
The Calgary, Alberta-based company did not disclose a price per share, nor detail how many shares would be issued. According to the preliminary prospectus filed last week, 6.75 million shares already are issued and outstanding. The final prospectus should be filed within 30 days. Canaccord Capital Corp., of Calgary, is the offering's agent.
"This money, along with the recent private placement, provides us with the resources to go through 2000 and fund the preclinical development and do Phase I studies on Reolysin," said Brad Thompson, president and CEO of Oncolytics.
In August, the two-year-old company concluded a private placement raising gross proceeds of $608,520, with 1.5 million special warrants selling at a price of 41 cents apiece. Each share purchase warrant is exercisable to purchase one Oncolytics common share at 51 cents each within two years of the IPO.
Synsorb Biotech, also of Calgary, purchased the company earlier in April for $1.35 million ($C2.5 million) worth of Synsorb shares. After the IPO, Synsorb will own between 45 percent and 55 percent of Oncolytics, Thompson said.
Reolysin, the company's lead product, is a naturally occurring reovirus that is able to replicate specifically in tumor cells bearing an activated Ras pathway. Ras is an important component of a pathway controlling normal growth and cell differentiation and when mutated, may account for about 30 percent of all human tumors. Mutations in Ras are highly represented in pancreatic (90 percent), sporadic colorectal (50 percent), lung carcinomas (30 percent), myeloid leukemia (30 percent) and thyroid tumors (50 percent). However, Ras may play an even greater part in more than half of all tumors because of its central role in signal transduction, the company said.
"It has been shown to cause a complete tumor regression in animal models," Thompson said.
In addition, it has been demonstrated the virus could kill human cancer cells in vitro derived from breast, prostate, pancreatic and brain tumors, he said.
The company intends to start recruiting patients next March for a Phase I trial in patients with metastasized cancer.
Synsorb's stock (NASDAQ:SYBB) closed Monday at $2.03, up 3 cents.