By Jim Shrine
AnorMED Inc. found financing easier in Canada than it would have been in the U.S. as it raised $20.1 million (C$30.5 million) in an initial public offering earlier this month.
The Vancouver, British Columbia, company got its start as the biomedical research group at Johnson Matthey plc, a $2 billion London-based company dealing in precious metals. It spun off in 1996 and now has five products in the clinic, three partnerships and a few other prospects in preclinical studies.
AnorMED¿s technology is based on ¿coordination chemistry,¿ or how metal atoms interact with molecules and ions. It applies expertise in metals to development of pharmaceutical products.
¿As far as we know we¿re the only company that¿s focused on metals and medicines,¿ Bill Adams, chief financial officer at AnorMED, said, adding that other companies do have programs in that area but not as their entire platform. ¿Metals-based pharmaceuticals currently sell about $2.5 billion per year.¿
AnorMED¿s initial public offering follows a C$10 million private financing in late 1997 and its seed round of about C$20 million in 1996. When it was spun out, AnorMED already had collaborations in place with Shire Pharmaceuticals Group plc, of London, and Dupont Pharmaceuticals Inc., of Wilmington, Del.
It¿s Easier For IPO To Get Attention In Canada
¿Had we attempted this [IPO] on Nasdaq I don¿t think we would have garnered the same attention as we did in Canada,¿ Adams said. ¿There¿s a smaller population of public companies in Canada, and certainly a small population of late-stage companies. We have two products in Phase III and three others in the clinical process. We¿re later stage than the average company going public.¿
Nesbitt Burns Inc., of Toronto, was lead underwriter for the offering. Also participating were Toronto-based companies CIBC Wood Gundy Securities Inc. and RBC Dominion Securities Inc, as well as Vancouver-based Goepel McDermid Inc. The stock, which priced at $C6.10 per share, is trading on the Toronto Stock Exchange under the symbol AOM.
Adams said the seven founding members of AnorMED had been together about 10 years before approaching the parent company about spinning off. Johnson Matthey¿s initial 40 percent ownership position has been reduced to 20 percent.
¿Johnson Matthey wanted to focus more on the core metals business,¿ Adams said. ¿The long time frames involved in pharmaceutical development didn¿t fit in with the focus of their business.
¿We have about 45 people now,¿ he said. ¿This financing will allow us to continue ramping up our business plan, which gives us the capacity to take drugs further into the clinic. We plan to add about 20 to 25 people this year.¿
AnorMED¿s two Phase III products were partnered early on, while it still was part of Johnson Matthey, and therefore the terms are not as favorable as its latest deal, a US $33 million collaboration on a cancer drug with London-based Zeneca Pharmaceuticals plc.
In January, AnorMED and Shire entered Phase III with Lambda, a lanthanum carbonate-based drug for treating patients with high blood phosphate levels. Kidney failure patients undergoing dialysis tend to build up high levels of phosphate, leading to weakening of the bones.
Also in Phase III, with Dupont, is DMP-444, a radiopharmaceutical imaging agent for detecting deep vein thrombosis. With both DMP-444 and Lambda, AnorMED is entitled to sales royalties.
The company has three products in Phase I or early in Phase II: ZDO-473, for cancer; AMD-3100, for HIV; and Atiprimod, for rheumatoid arthritis.
ZD0473 is a platinum-based agent designed to overcome resistance to the platinum-based cancer drugs cisplatin and carboplatin. The deal on that drug with Zeneca included $33 million in up-front and milestone payments as well as double-digit royalties on sales, Adams said.
The unpartnered HIV drug, AMD-3100, is designed to inhibit the binding of HIV to the CXCR4 chemokine receptor, thus preventing the virus from entering the healthy cell, the company said.
AnorMED is planning a Phase II trail of Atiprimod while seeking a partner.
¿We also have several preclinical drug candidates right now,¿ Adams said. ¿It all stems from the expertise in metals and medicine. Rather than focus on a particular disease we focus on understanding how the metals interact with the body.¿