By Lisa Seachrist
WASHINGTON — After postponing its market debut due to unpredictable conditions last December, Progenics Pharmaceuticals Inc. completed an initial public offering for $14.1 million — approximately $10 million less than the company expected to raise when it revived the offering this month.
Progenics, of Tarrytown, N.Y., issued 2 million shares at an offering price of $8 per share. The offering price was 33 percent less than the $12 per share assumed in the prospectus filed with the Securities and Exchange Commission Tuesday.
In a prepared statement, Progenics maintained that the reduced net proceeds are not likely to adversely affect its business plans or operations. The funds are earmarked for research and development, in-licensing of technology and clinical trials of product candidates as well as for working capital and general corporate purposes.
Progenics originally registered for an IPO with the SEC in October 1996 to sell 2 million shares in a projected range of $11 to $13 per share. The company reduced the price to between $7 and $9 in November 1996 before postponing the offering the next month, when biotech stocks suffered a 6 percent drop on the American Stock Exchange (AMEX) Biotech Index.
Underwriters for the offering were CIBC Oppenheimer Corp. and BancAmerica Robertson Stephens, both of New York, and Vector Securities International Inc., of Deerfield, Ill. The underwriters have overallotment options for 300,000 additional shares.
As of Sept. 30, Progenics had cash and cash equivalents totaling $7.72 million.
The company is applying its immunology expertise to the development of products for cancer and viral diseases. Its drug candidates are designed to induce immune responses or mimic natural immunity.
Its most advanced drug candidate, GMK, is a therapeutic vaccine to treat malignant melanoma. The vaccine incorporates the GM2 ganglioside, a cancer antigen present in 95 percent of all melanoma cells, conjugated with immunogenic proteins and an adjuvant to steer the immune system to destroy cancer cells.
In August 1996, Progenics began a National Cancer Institute-funded Phase III trial of GMK for patients with Stage III malignant melanoma. Enrollment of 850 patients in the U.S. and Canada is expected by the end of 1998. A worldwide Phase III trial is expected to begin in early 1998.
A second ganglioside conjugate vaccine, MGV, is in Phase I/II trials to evaluate its safety and immunogenicity in malignant melanoma patients. MGV incorporates the gangliosides GD2 and GM2, antigens found on the surface of tumor cells such as colorectal and gastric cancer, small cell lung cancer and sarcoma.
In July 1997, the GMK and MGV vaccines served as the basis of a research and development collaboration with Bristol-Myers Squibb Co., of New York, worth up to $61 million in up-front and milestone payments. The company has received $13.3 million in up-front payments from Bristol-Myers, which gained worldwide rights to the two products.
Progenics' other major research program uses two technologies to combat HIV. Its universal antiviral binding agent (UnAB) technology creates antibody-like molecules to neutralize HIV and destroy HIV-infected cells. A second approach, HIV Fusion (CCR-5), inhibits the entry of genetic information from HIV into cells and prevents viral replication.
The company expects to initiate Phase I/II trials of two prospective UnAB treatments in late 1997 and to announce a collaboration involving the CCR-5 program. *