Alanex Corp., a combinatorial chemistry company, and CVTherapeutics Inc., a cardiovascular disease drug development firm,are heading into the capital markets with initial public offerings (IPO)bolstered by recent collaborations with big pharmaceuticalcompanies.

Alanex, of San Diego, registered to sell 2.5 million shares at aprojected price in the range of $10 to $12. Based on an IPO price of$11 the company would raise $27.5 million in gross proceeds.

Underwriters PaineWebber Inc. and Needham & Co. Inc., both ofNew York, and Sutro & Co. Inc., of Los Angeles, have options tobuy another 375,000 shares to cover overallotments.

CV Therapeutics, of Palo Alto, Calif., filed for an IPO four monthsafter completing a $13 million private placement. In its initialprospectus, the company did not state the number of shares to be soldor an estimated share price.

Both companies are wading into the public markets with expectationsof a post-Labor Day return to favor of biotechnology stocks amonginvestors following a summer slump. In August, $156 million raisedin public offerings, both follow-on and initial, was the lowestmonthly total this year.

Two market indices, however, suggest interest is being revived. TheAmerican Stock Exchange Biotech Index and the Chicago BoardOptions Exchange Biotech Index have increased substantially fromsummer lows. The AMEX Biotech Index jumped 22 percent from114.44 July 25, 1996, to 140.02 Monday. The CBOE Biotech Indexhas climbed 16 percent from 145.12 July 25 to 168.48 Monday.

Alanex, in July 1996, entered an alliance with Roche Bioscience, ofPalo Alto, Calif., to discover small-molecule compounds fortreatment of pain. Roche Bioscience is a research unit of Basel,Switzerland-based Roche Holding Ltd.

Four months earlier, Alanex signed an agreement with Novo NordiskA/S, of Bagsvaerd, Denmark, for discovery of compounds to treatdiabetes. Alanex also has a collaboration with Astra AB, ofSodertlje, Sweden, for developing pain relief drugs.

Revenues from the corporate partners enabled Alanex to post a $1.36million profit for the first six months of 1996. As of June 30, 1996,the company had $4.3 million in cash.

Alanex describes its technology as "pharmacophore directed parallelsynthesis." Its small-molecule discovery, company officials havesaid, differs from other approaches by integrating combinatorialchemistry with high-throughput screening, computational chemistryand medicinal chemistry to create drug candidates that are ready forpreclinical trials.

Alanex's most advanced drug candidate is an anti-pain compoundunder development with Astra. The small molecule is described as an"opiate receptor agonist" and is being evaluated in preclinical studies.

CV Therapeutics said its drug discovery is based on research into thegenetics of cardiovascular diseases. The company is targeting "theadenosine A1-receptor, the cell cycle and chronic inflammation" fordevelopment of compounds.

It signed its first major pharmaceutical collaboration in May 1996with Bayer AG, of Leverkusen, Germany. Bayer licensed rights to amolecular target linked to inflammatory disorders. CV Therapeuticswas paid an up-front fee and will receive milestone payments androyalties.

As of June 30, 1996, CV Therapeutics had $12.5 million in cash andreported a net loss of more than $5.4 million for the first six monthsof the year.

The company has two drug candidates in clinical trials. One productis an adenosine A1-receptor antagonist for treatment of edemaassociated with congestive heart failure and kidney failure. The otherdrug, ranolazine, was licensed from Syntex USA, of Palo Alto, Calif.,a subsidiary of Roche. Ranolazine (piperazine acetamide) is targetedfor treatment of angina. n

-- Charles Craig

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

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