With biotechnology sector stocks in a slump the past two months,Progenics Pharmaceuticals Inc. this week postponed its initial publicoffering (IPO), opting to wait until market conditions improve.

The decision to delay indefinitely the IPO was made a week after thecompany scaled back the offering, lowering the projected price rangefor the shares.

Progenics, of Tarrytown, N.Y., has a therapeutic vaccine in Phase IIItrials for melanoma and another vaccine in Phase I/II studies for avariety of cancers, including lymphoma and colorectal and lungcancers.

Another Progenics development program, focusing on viral diseases,has produced AIDS drug candidates, which are expected to beginevaluations in clinical trials next year.

Progenics, founded in 1986, registered with the Securities andExchange Commission for its IPO in early October, proposing to sell2 million shares between $11 and $13 per share. Based on a mid-point price of $12, the offering was expected to generate $24 million.

On Nov. 26 the company filed an amendment with the SEC, loweringthe projected IPO price to a range of $7 to $9 per share.

Progenics officials said they have not withdrawn the IPO, but havepostponed it indefinitely. They said postponement will not delay anyof the company's drug development programs and they expect torevive the offering when the market's financing window widens.

Underwriters for the IPO are Oppenheimer & Co. Inc., of New York,and Vector Securities International Inc., of Deerfield, Ill.

As of Sept. 30, Progenics said it had $1.75 million in cash and a netloss of $3.5 million for the first nine months of 1996. Following thesale of 2 million shares, the company would have 8.55 million sharesoutstanding.

When Progenics proposed its IPO in early October, biotechnologystocks began a decline following a post-Labor Day rally from a slumpduring the summer.

On Oct. 3 the American Stock Exchange (AMEX) Biotech Indexstood at 139.66 and the Chicago Board Options Exchange (CBOE)BioTech Index was at 166.86. The AMEX index was down 6 percentby Nov. 21, closing at 130.88, a more than 8 point drop. The CBOEindex fell even lower, plummeting 9 percent to close Nov. 21 at151.88, a nearly 15 point decrease.

Progenics' most advanced drug development program is a therapeuticvaccine against melanoma. The product, GMK, is in Phase III trialsto prevent recurrence of the cancer following surgery. GMK usesgangliosides, which are found in large quantities in certain cancercells, as antigens to stimulate an antibody attack on tumor cells.

The gangliosides, molecules with carbohydrate and lipid components,are attached to immunogenic carrier proteins to create a conjugatevaccine, which when combined with an adjuvant, unleashes a specificantibody attack on cancer cells.

Progenics has another ganglioside conjugate vaccine, called MGV, inPhase I/II trials for a variety of cancers.

The HIV drug development program employs two approaches tofighting the deadly virus. Progenics universal antiviral binding agenttechnology has produced molecules that target the virus' glycoprotein(gp) 120, which enables HIV to infect CD4 cells of the immunesystem. Two drug candidates, PRO 542 and PRO 367, based ongp120 are expected to begin testing in clinical trials next year.

The other approach to HIV targets the CKR-5 receptor on immunesystem cells. That receptor, company researches have found,facilitates entry into cells of HIV's genetic code, which allows thevirus to replicate, after HIV binds to the CD4 cells. Progenics isdesigning molecules to block the interaction of HIV and the receptor.n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.