PARIS - Biovector Therapeutics, which specializes in the development of novel drug delivery systems, has announced its intent to launch an initial public offering (IPO) on France's Nouveau Marché at the earliest opportunity. “We are in the process of finalizing our prospectus, so we are ready, but the market conditions are not right at the moment,“ chairman Emile Loria told BioWorld International.

Loria said the company wants to “raise a large amount - at least FFr200 million [US$35.5 million],“ and it could be as much as FFr300 million. “But we will still have cash reserves of over FFr100 million at the end of 1998, so, given that we have a burn rate of about FFr50 million a year, we have enough funds to last two more years.“

Biovector therefore does not need an immediate increase in capital, and Loria added that “if we haven't launched the IPO by the end of November, we will wait until next year.“

The purposes of declaring its intentions in advance were to get the company's name and activities better known and to prepare the financial and investor community so as to ensure maximum interest, Loria explained. Biovector was founded in 1989 and its shareholders at present consist mainly of venture capital companies and institutional investors in France, Germany and the United Kingdom. They include 3i Group (which has a 12 percent stake), Sofinnova (9 percent), Atlas (9 percent ), CDC Innovation (8 percent), Old Court Ltd. (8 percent), Sofinov (6 percent) and Jafco (6 percent), as well as the Canadian company BioChem Vaccins, with which Biovector has a research collaboration agreement and which has acquired a 7 percent stake in the company.

Once all shareholders have exercised their options, their holdings on a fully diluted basis will be as follows: BioChem Vaccins, 10 percent; 3i Group, 9 percent; Sofinov, 7 percent; CDC Innovation, Atlas and Old Court 6 percent each; Sofinov, 5 percent; Jafco, 4 percent; managers and staff, 17 percent; and others, 30 percent.

Biovector Therapeutics, which is based near Toulouse, in southwestern France, and employs some 60 people, has developed proprietary drug delivery systems called “biovectors“ - synthetic particles that mimic living organisms. It has patented four systems designed to deliver various antigens and genes for the pharmaceutical companies that are, or will be, Biovector's customers and partners.

BioChem Vaccins, a subsidiary of BioChem Pharma, of Laval, Quebec, became Biovector's first partner in April, when it signed an agreement to co-develop six vaccines utilizing the French company's delivery systems. As well as financing clinical trials in North America, BioChem agreed to acquire a $4 million equity stake in Biovector. The most advanced product it is helping to develop is an influenza vaccine that uses a nasal spray delivery system instead of injection. Phase I trials will be completed by the end of this year and Phase II trials are scheduled for 1999.

Earlier this week, Biovector signed a potential $16 million deal with Biomira Inc., of Edmonton, Alberta, to develop a cancer vaccine aimed at B cell lymphoma. The agreement calls for a $500,000 up-front payment from Biovector to Biomira, with $15.5 million if all milestones are met. Biomira recently filed an investigational new drug application with the FDA in order to begin Phase I clinical trials of the vaccine.

The other pathologies being targeted by Biovector are cancer, certain infectious diseases, meningitis, hemophilia and AIDS, which are all in the preclinical stage. The company will team up with other partners to take these products into clinical development. Loria acknowledged that the launching of Biovector's IPO also depends on the conclusion of more agreements with known pharmaceutical companies. “Our activities are becoming increasingly costly as we enter the phase of clinical trials,“ he said. “We will have three products in Phase I trials in 1999, and that will require enormous funding.“

The Phase I trials planned for next year include two therapies for cancer. Trials of one cancer treatment will be conducted at the Villejuif, France-based Institut Gustave Roussy, Europe's leading cancer clinic. Loria said Biovector is negotiating with the French company that recently acquired the license for the therapy concerned.

In addition, clinical trials of a therapeutic vaccine for lymphoma are to be conducted in the U.S., under license from Biovector Therapeutics by an American company with which Biovector is also negotiating at the moment. Biovector, which will retain the exclusive worldwide license for the therapy, will take charge of post-Phase I development, including filing for marketing approval, while its U.S. partner will manufacture it for the North American market.

Biovector has four other products in preclinical development: a preventive vaccine for meningitis; an anti-cytomegalovirus vaccine to treat immunodeficiency in transplant patients and AIDS, pneumonia and hepatitis sufferers; second-generation DNA-based vaccines for influenza and AIDS; and gene therapy applications for the secretion of plasma proteins, such as Factor VIII and Factor IX in the treatment of hemophilia.

Loria expects to have his first product on the market in 2003, but is not making any prediction about profits because, he said, he believes investors do not invest in biotechnology companies to earn dividends. “We will invest all our revenues in new projects, so the share price will increase,“ he said. “The royalties we earn will all be net profit, but there will always be other projects to invest in.“

The company expects its turnover to remain at FFr11 million in 1998, but its net loss is forecast to double to FFr36 million this year from FFr18.6 million in 1997, reflecting increased research and development spending. Its activities are set to expand substantially in the coming years, and Loria said the company's work force will be up to 150 by 2001. *

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