Alkermes Inc. raised $23 million in a self-managed offering of 2.3million shares that was closed in less than a week.
The Cambridge, Mass., company initially filed on May 3, 1996, tosell 1.5 million shares. Demand pushed the offering to 2.3 millionshares that were priced May 8 at $10 each, a 9 percent discount to theclosing bid price. The shares were sold to five institutions.
"It was incredibly simple; a very fast deal," Alkermes CEO RichardPops said. "We've got too much going on at the company to gothrough the distractions of doing a normal, underwritten publicoffering with a road show and all the time that takes."
Among the programs going on at Alkermes are development of thedrug delivery vehicles RMP-7, which allow passage of smallmolecules into the brain, and ProLease, which is designed for thesustained-release delivery of peptides and proteins. A "significantlyundervalued asset of the company," Pops said, is Medisorb, arecently acquired technology that's similar to ProLease except it's fordelivery of small molecules.
"We're emerging as one of the companies with the mostdifferentiated drug delivery technologies," Pops said. "We'reapplying the tools of biotech to drug delivery. It's the niche we'rebeginning to carve out for ourselves."
Alkermes' last financing was a $16 million September 1995 publicoffering in which 2.3 million shares were sold for $7 each, includingunderwriters' overallotment options. (See BioWorld Today, Sept. 22,1995, p. 1.)
The company now has 18.3 million shares outstanding. Its stockclosed Wednesday at $12.44, down 6 cents.
Alkermes hasn't released financial statements for its fiscal year thatended March 31, 1996. It was projecting a loss for the year of about$14 million. The company reported having $43 million in cash at theend of 1995, and is expecting to spend more this year than last.
The extra spending will come about in part because AlkermesClinical Partners L.P., the partnership set up to fund RMP-7, recentlyexhausted the $46 million it raised to fund development of RMP(receptor-mediated permeabilizer). Alkermes will take over fundingfrom here and has the option to repurchase the program for $46million plus royalty considerations.
The RMP technology involves a peptide that increases thepermeability of the blood-brain barrier by binding to a receptor onbrain endothelial cells, triggering a brief relaxation of cellularjunctions and allowing passage of small molecules into the brain. Thedelivery vehicle is in four Phase II studies with a chemotherapeuticagent for brain cancer indications, and one Phase I/II study.
Pops said the Phase II studies were designed to have some pivotalfeatures, in light of new regulations from the Clinton administrationthat could result in faster and easier review of cancer therapies.
Alkermes is discussing potential collaborations with interested partiesbut has no intention of doing deals at this time.
"With all the clinical data coming the value of the program is goingto change dramatically over the next several months," Pops said,adding that Alkermes is in a strong position because it could sell theproduct itself if a favorable deal is not worked out. "We should havedata by the end of the year that lets us know if we have a product onour hands," he said.
The company's ProLease technology, however, already has led tocollaborations with Genentech Inc., of South San Francisco;Schering-Plough Corp., of Madison, N.J.; and Boehringer-MannheimGmbH, of Mannheim, Germany.
Pops said clinical trials are ongoing involving ProLease delivery ofGenentech's human growth hormone in adults with growth hormonedeficiencies. The idea is to deliver growth hormone once a monthinstead of daily. Pops said the Phase I study should be completed thissummer.
A feasibility study is completed with Boehringer-Mannheim on anundisclosed protein and the companies can enter negotiations tocontinue. The deal with Schering-Plough involves the alphainterferon product, Intron-A.
Pops said collaborations for Medisorb could be completed in the nextfew months. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.