Cubist Pharmaceuticals Inc. registered Wednesday to sell 2.5 millionshares and with the filing disclosed two new significantcollaborations with pharmaceutical companies.
The Cambridge, Mass., company, which is developing drugs to treatinfectious diseases caused by fungi and bacteria, proposed the sale of2.5 million shares at $11 to $13 per share. Co-managing the offeringare Hambrecht & Quist LLC, of New York, and Pacific GrowthEquities Inc., of San Francisco.
Cubist, incorporated in 1992, signed its first major deal lastDecember with Pfizer Inc. Cubist could receive up to $21.5 millionin precommercial payments, plus royalties on sales. (See BioWorldToday, Jan. 16, 1996, p. 1.)
In its prospectus Cubist detailed two new relationships signed thismonth. One, with Bristol-Myers Squibb Co., is valued at up to $56.5million. Another deal, with Merck & Co. Inc., is worth up to $20.5million. All three deals also include royalty potential. Bristol-Myersand Pfizer made $5 million and $4 million equity investments,respectively.
Cubist, which focuses primarily on drug-resistant strains, identifiesintracellular targets needed for cell function in bacteria and fungi, andtries to inhibit them. The company uses rational, target-baseddiscovery methods and has more than 135,000 small molecules toscreen against each of its proprietary targets.
Initially Cubist is developing anti-infectives to inhibit the process ofprotein synthesis. Specific targets are enzymes called aminoacyl-tRNA synthetases, ribonuclease P and amidotransferase, and thetransfer of amino acid-charged molecules to the site of synthesis byelongation factors.
Cubist's lead candidates target aminoacyl-tRNA synthetases, andhave shown they can selectively inhibit growth of bacteria and fungi.That program is at the heart of Cubist's three collaborations.Optimization of lead candidates, and selection for preclinical testing,is expected by the end of the year, with an investigational new drugapplication filing by the end of 1997.
Cubist and Bristol-Myers, of New York, are screening six of Cubist'stargets against Bristol-Myers' compound library. Cubist is using threetargets against the compound library of Merck, of WhitehouseStation, N.J. The deal with New York-based Pfizer involves sixaminoacyl-tRNA synthetase targets.
Cubist's technology attacks the translation phase of proteinproduction. That occurs in the cell's cytoplasm, where amino acidsare assembled into proteins based on sequences specified bymessenger RNA. The goal is to prevent the enzymes from assemblingthe amino acids during translation. The intended result is cell death inthe pathogenic organism without interfering with the correspondinghuman enzyme.
Cubist on March 31, 1996, reported $6.2 million in cash on a proforma basis, which includes the $4 million equity investment byBristol-Myers. The company lost $5.4 million in 1995. Cubist wouldhave nearly 8.9 million shares outstanding if 2.5 million are sold inthis offering. Warrants and options are outstanding on another600,000 shares. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.