Onyx Pharmaceuticals Inc. achieved its goal of generating $30million in its initial public offering (IPO), capitalizing not only oninvestor interest in genomics, but also on the company's anti-cancerfocus.
Onyx's offering of 2.5 million shares was priced at $12 per share,which was midway in the range of $11 to $13 projected when theRichmond, Calif., company registered for the IPO in April. (SeeBioWorld Today, April 17, 1996, p. 2.)
Onyx's stock (NASDAQ:ONXX) debuted Thursday and closed at$11.37.
Onyx was formed as a spin-off from Chiron Corp., of Emeryville,Calif., which remains the largest shareholder after the offering with a15.6 percent ownership interest.
Following the IPO, Onyx has nearly nine million shares outstanding.
Underwriters Montgomery Securities, of San Francisco, and UBSSecurities LLC, of New York, have options to purchase another375,000 shares to cover overallotments.
At the end of 1995, Onyx had $12.5 million in cash and reported anet loss for the year of $8.4 million.
The company's two basic technologies involve functional genomicsand development of therapeutic viruses. Onyx's research has focusedon understanding how specific gene mutations contribute to cancergrowth.
Its lead product, Onyx-15, is a genetically engineered adenovirusmodified to kill only cancer cells that contain mutations of the tumorsuppressor gene, p53. The p53 mutations, which allow cells to growunchecked, are found in 50 percent of cancers. The company beganPhase I clinical trials of the treatment this year and is seeking apartner for the development program.
Onyx has collaborations with Bayer AG, of Leverkusen, Germany,Warner-Lambert Co., of Morris Plains, N.J., and Eli Lilly and Co., ofIndianapolis.
The agreement with Bayer, signed in May 1994, could be worth up to$75 million to Onyx and is aimed at developing small moleculecompounds that target cancer cells with mutated Ras genes, which arefound in pancreatic, colon and lung cancers.
The deal with Warner-Lambert, worth as much as $25 million, wasnegotiated in May 1995 and centers on development of smallmolecule compounds to affect cell cycle genes, which when mutateddo not function as a check on abnormal cell growth.
Onyx and Lilly also began their collaboration in May 1995. Thefeasibility study was aimed at researching how mutations of theBRCA1 gene cause breast cancer. Negotiations currently are ongoingon whether to extend the alliance.
Following the IPO, Bayer owns 10.5 percent of Onyx and Warner-Lambert has a 5.2 percent ownership interest.
Onyx's offering is the latest in a series of successful public equitysales by companies with expertise in genomics. Earlier this week,Millennium Pharmaceuticals Inc., of Cambridge, Mass., completedan IPO, raising $54 million through the sale of 4.5 million shares at$12 per share. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.