By Lisa Seachrist
Pharmacyclics Inc. registered with the SEC for a public offering of 1.75 million shares of common stock.
In the filing, the Sunnyvale, Calif.-based company said it anticipates raising $41.1 million assuming an offering price of $25.125 per share. If the underwriters' overallotment is exercised in full the offering would gross $47.3 million. Underwriters are Morgan Stanley Dean Witter of New York, Hambrecht & Quist LLC, of San Francisco, and Pacific Growth Equities, of San Francisco.
Once the public offering is closed, the company will have about 14.2 million shares outstanding, not including shares that would go to the underwriters. Pharmacyclics' stock (NASDAQ:PCYC) closed Friday at $26.75, down $2.125.
The company said it will use the proceeds of the offering for research and development activities, including clinical trials, process development and manufacturing support, and for general corporate purposes. Pharmacyclics noted in its registration statement it may use a portion of the proceeds to acquire or invest in complementary businesses, products or technologies, although it currently is not in any such negotiations.
Company officials were in a "quiet period" and could not comment.
Pharmacyclics specializes in developing energy-potentiating drugs to treat cancer, atherosclerosis and retinal disease. Its platform technology involves development of ring-shaped molecules known as texaphyrins, which localize in cancer cells, atherosclerotic plaques and neovasculature. From there they can be activated by various forms of energy - including X-rays, light and chemotherapeutics - to eliminate diseased tissues.
Xcytrin, the company's lead molecule, is in Phase III clinical trials to increase the efficacy of radiation therapy for tumors that have spread to the brain. Formerly known as Gd-Tex, or gadolinium texaphyrin, Xcytrin selectively accumulates in cancer cells and increases the damage to them from radiation by absorbing free electrons generated during irradiation, and prolonging and magnifying the destructive action of highly reactive hydroxyl free radicals.
Pharmacyclics also has completed Phase II trials of its photodynamic therapy, Lutrin, for recurrent breast cancer. Lutrin, a lutetium texaphyrin, is activated by light to destroy tumor cells. The company plans to initiate Phase I studies of both Xcytrin and Lutrin in other cancer indications.
Another lutetium texaphyrin, Antrin, has completed Phase I studies to evaluate its safety and efficacy as a photo-angioplasty treatment for patients with peripheral arterial disease involving the blood vessels of the lower extremities. Optrin, a texaphyrin for the treatment of age-related macular degeneration, is in Phase I/II clinical development.
Pharmacyclics reported that for the year ending June 30, its revenues were about $2 million, most coming from a milestone payment from Optrin partner, Alcon Pharmaceuticals Ltd., of Fort Worth, Texas, and contract revenue from both Alcon and its Lutrin partner, Nycomed ASA, of London. Research and development expenses were $21.9 million and it cash and investments totaled $51.5 million.