By Jim Shrine
BioMarin Pharmaceutical Inc., which was spun off two years ago to develop carbohydrate enzyme therapies, filed for an initial public offering that the company expects will raise $58.5 million.
BioMarin, of Novato, Calif., is preparing to seek marketing approval for its lead product, BM101, a form of alpha-L-iduronidase intended to replace a deficiency of that enzyme in patients with the rare genetic disorder mucopolysaccharidosis I (MPS-I). It is being developed in a joint venture with Genzyme Corp.
BioMarin did not disclose in its filing how many shares would be offered or the proposed price of those shares. All the shares are being sold by the company. U.S. Bancorp Piper Jaffray Inc., of Minneapolis, is the lead underwriter. Other underwriters are Vontobel Securities Ltd., of Zurich, Switzerland; Schroders Securities Co. Ltd., of Japan; and Leerink Swann & Co., of Boston.
The company, which last month completed a $26 million private placement, said it intends to use proceeds from the offering to fund its 50 percent share of expenses in the BM101 joint venture and additional enzyme therapy programs, and to cover development, clinical, manufacturing and corporate costs.
Glyko Biomedical Ltd., of Toronto, spun off BioMarin in March 1997 and, in October, sold to BioMarin its wholly owned subsidiary, Glyko Inc., for stock valued at $14.5 million. Glyko Inc., which already shared BioMarin¿s facilities in Novato, provides analytic services to laboratories and diagnostic services using carbohydrates as markers. (See BioWorld Today, Oct. 9, 1998, p. 1.)
According to BioMarin¿s prospectus, the company had 26.2 million shares outstanding on March 1. Glyko Biomedical, essentially a holding company, had a pre-offering stake of 41.7 percent. Another significant shareholder is BB BioVentures LP, of Cambridge, Mass., with 20.7 percent of the outstanding shares. Grant Denison, BioMarin¿s chairman and CEO, owned 5.7 percent of the company and Genzyme owned 5.1 percent. Current officers and directors together own 13.8 percent of BioMarin.
Genzyme, of Cambridge, Mass., is obligated to purchase $10 million in stock when BioMarin goes public, and to pay BioMarin $12.1 million upon approval of BM101. Genzyme made an $8 million equity investment in BioMarin when the joint venture was finalized in September. The companies are sharing development costs and will share profits. (See BioWorld Today, Sept. 16, 1998, p. 1.)
Lead Product Addresses Niche Market
MPS I, of which the most serious form is Hurler¿s syndrome, is a lysomal storage disease that afflicts 2,000 to 3,000 people, mainly children, in the developed world. The disease, characterized by a halt in physical development, causes carbohydrate material to build up in all parts of the body, resulting in a number of deformities.
The enzyme treatment was granted orphan status and put on the fast track by the FDA. The company¿s Phase I trial in 10 patients was deemed pivotal. Patients undergoing 26 weeks of treatment showed improvements across a range of endpoints, including reduction in liver or spleen sizes in eight of the 10 patients and lowered urinary carbohydrate levels in all patients.
BioMarin is responsible for obtaining U.S. regulatory approval as well as manufacturing and process development. Genzyme is responsible for international approvals, worldwide sales and pricing and reimbursement issues.
BioMarin¿s strategy is to focus on drug candidates with known biology and low technical risk; to target products that address life-threatening conditions and can be approved quickly; to pursue well-defined, niche markets; and to develop a direct sales and marketing organization for certain market segments.
The company is developing enzyme replacement therapies for other genetic diseases, and said there are nine other MPS disorders caused by a single enzyme deficiency. The second drug in BioMarin¿s pipeline, BM102, is being developed to treat MPS-VI. The company received an orphan designation for the drug, and intends to file an investigational new drug application in the fourth quarter. Further back are carbohydrate enzymes to improve burn debridement and act as antifungals. n