EntreMed Inc., which focuses on the role of blood and blood vesselsin preventing and treating diseases, said Wednesday it grossed $48million in its initial public offering (IPO).
The Rockville, Md., company sold 3.2 million shares at $15 pershare. EntreMed realized another $5 million through the sale of 3.3million shares at the offer price to collaborator Bristol-Myers SquibbCo.
EntreMed now has about 12 million shares outstanding. UnderwritersAllen & Co. Inc. and Dillon, Read & Co. Inc., both of New York,and Volpe, Welty & Co., of San Francisco, have options on another480,000 shares to cover overallotments.
One of the company's programs is exploiting the anti-angiogenesisapplications of thalidomide, thalidomide analogues and Angiostatinprotein. Angiogenesis is the process by which new blood vessels areformed. Inhibiting angiogenesis could help block the growth ofprimary and metastatic cancers by eliminating a tumor's bloodsupply.
EntreMed and Bristol-Myers, of Princeton, N.J., agreed in December1995 to collaborate on the anti-angiogenic compounds. Bristol-Myersmade a $6.5 million equity investment (separate from the $5 millionin the IPO) and agreed to fund research for five years and paymilestones and sales royalties. In return Bristol-Myers receivedworldwide rights to anti-angiogenic applications from thecompounds.
Research on which that program is based was pioneered by JudahFolkman, chief of surgical research at Children's Hospital in Bostonand professor of pediatric research at Harvard Medical School. Hetheorized that preventing the growth of new blood vessels, whichfeed cancerous tissues, would starve the tumor. EntreMed issponsoring Folkman's work.
EntreMed in its prospectus said Phase II trials have been startedevaluating thalidomide in inhibiting the progression of breast cancer,prostate cancer and Kaposi's sarcoma. Phase II studies also areongoing using the same drug to inhibit the progression of age-relatedmacular degeneration, a cause of blindness.
The company, incorporated in 1991, said it has identified, sequenced,cloned and recombinantly expressed Angiostatin protein, whichappeared to show in preclinical studies it could inhibitvascularization and growth of tumors.
A second EntreMed program focuses on a blood cell permeationdevice designed to enhance the ability of red blood cells to deliveroxygen to organs and tissues, and which also may be useful indelivering drugs, genes or other agents that would not readily diffusethrough blood cell membranes. A prototype device has beenconstructed to introduce inositol hexaphosphate molecules into redblood cells.
The company plans to broaden its portfolio through sponsoredresearch agreements and augment development through in-housecapabilities.
On March 31, 1996, EntreMed had $7.6 million in cash andequivalents. Its net loss in 1995 was $7.7 million.
Bristol-Myers, with a 10.6 percent stake, is EntreMed's largestshareholder. D.H. Blair Investment Banking Corp., of New York,owns 8.4 percent of EntreMed shares, and John Holaday, EntreMed'schairman and CEO, owns 7.3 percent of the company.
The stock (NASDAQ:ENMD) closed Wednesday at $15.75. n
-- Jim Shrine
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