Triangle Pharmaceuticals Inc., whose executives are using theirexperience in developing AZT to bring other antiviral AIDS drugs tomarket, made a strong debut Friday with an initial public offering(IPO) of 4.2 million shares for $42 million.
Demand for the Durham, N.C., company, founded 15 months ago byformer employees of Wellcome plc prior to its merger with fellowLondon drug maker Glaxo plc, increased the shares offered by200,000 to 4.2 million. The offering was priced at $10 per share,which was higher than the projected range of $7.50 to $9.50.
Triangle's chairman and CEO, David Barry, and its chief scientificofficer, Phillip Furman, helped develop AZT for AIDS and acyclovirfor herpes. Like those compounds, Triangle's drug candidates arenucleoside analogues, which interfere with viral replication.
Company officials believe their new antivirals will be useful incombination therapies to treat chronic conditions such as AIDS andhepatitis in which the causative viruses develop resistance to drugs.
Triangle's successful IPO was priced Thursday. Anotherbiotechnology firm, Ingenex Inc., of Menlo Park, Calif. delayed itscapital market debut the same day.
Ingenex, a subsidiary of Titan Pharmaceuticals Inc., of Menlo Park,Calif., is developing gene therapies and applying functional genomicsto drug discovery. The company registered in July for an IPO of 1.85million shares at between $8.50 and $9.50 per share. The underwriteris Kaufman Bros., of New York.
After two slow months for IPO and follow-on offerings, Octoberrepresented a rebound of equity market activity for biotechnologycompanies with four IPOs and five follow-on offerings completed fora total of $241.2 million, according to BioWorld Financial Watch(BWFW).
A `Selective' Rebound In Equity Market
However, investors have been selective in their IPO choices. Inaddition to Ingenex, Alanex Corp., of San Diego, postponed itsoffering. Two other IPOs, Introgen Therapeutics Inc., of Austin,Texas, and Immusol Inc., of La Jolla, Calif., have yet to be pricedtwo months after registration. Alanex is a combinatorial chemistrycompany. Introgen is developing gene therapies for cancer. Immusolis focusing on ribozyme-based therapies.
Public offerings generated $158.7 million in August and nearlyground to a halt in September with only $40.5 million raised, asreported in BWFW.
Fariba Ghodsian, an analyst with Lehman Brothers in New York, saidinvestors being courted for IPOs "don't want to hear about earlystage drug development companies. They want later stagecompanies."
Most early stage firms attracting attention are those, such ascombinatorial chemistry companies, whose products are theirtechnologies.
In the current IPO market, Ghodsian said, "If your business model isbuilt on therapeutics and they are in preclinicals, it's almostimpossible" to find support.
Triangle's stock (NASDAQ:VIRS) debuted Friday at $10.875 andclosed at $10.937. The company has 17.2 million shares outstandingfollowing the IPO. Underwriters Dillon, Read & Co. and Bear,Stearns & Co. Inc., both of New York, have options to purchaseanother 630,000 shares to cover overallotments.
As of June 30, 1996, Triangle had $5.8 million in cash and reported anet loss of $5.5 million for the first six months of the year.
Triangle has two drugs in clinical trials and two others ready to beginPhase I studies.
The company's lead HIV compound is MKC-442 in Phase Ib/IIastudies. A Phase Ia trial demonstrated the nucleoside analogue waswell tolerated. Triangle is developing the compound with MitsubishiChemical Corp., of Tokyo, and has an option to obtain exclusiverights to the drug for most commercial markets worldwide.
Although MKC-442 is classified as a nucleoside analogue, Triangleresearchers said it operates like a non-nucleoside inhibitor of thereverse transcriptase enzyme, which helps copy DNA from the RNAtemplate for viral replication.
As the enzyme pieces together nucleic acids, a nucleoside analogue,which is a synthetic look-alike for nucleic acids, gets hooked in lineand interrupts the DNA copying process.
Non-nucleoside compounds do not mimic nucleic acids, the drugsattach directly to the reverse transcriptase enzyme and block itsfunction.
FTC is another Triangle nucleoside analogue under development forHIV. FTC is from the same nucleoside series as 3TC and preclinicalstudies suggest it is more potent.
The drug, 3TC, developed by Biochem Pharma, of Laval, Quebec, incollaboration with Glaxo Wellcome plc, of London, was approved bythe FDA in 1995 and has become the most prescribed AIDS drug,followed by AZT, which also is sold by Glaxo Wellcome.
A Phase Ib/IIa trial of FTC is expected to begin in 1997. A Phase Iastudy showed the drug was well tolerated.
Two more AIDS drugs in development are CS-92 and DAPD. Theformer, from the same nucleoside series as AZT, is expected to enterclinical trials in 1997. The latter, a nucleoside from a different familythan Triangle's other AIDS compounds, could begin evaluation inclinical studies in late 1997 or early 1998.
Triangle also is targeting FTC and DAPD for hepatitis. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.