ICOS Corp. said Tuesday that it completed a fully subscribed rightsoffering that raised about $23.3 million for the Seattle company.
The offering gave existing shareholders the right to purchase oneshare of stock at a discount for every four they owned on Oct. 28.ICOS sold about 6.43 million shares at $3.625 per share, a discountof about 10 percent to the $4 price the stock was trading at inOctober. The company's stock (NASDAQ:ICOS) closed at $4 pershare Tuesday, down 25 cents.
"You haven't seen rights offerings in biotechnology, but it workedvery well for us," Lacy Fitzpatrick, the company's coordinator ofinvestor relations, told BioWorld. "We could have done a privatedeal for the same amount of money, but this allowed ourshareholders to participate on a level playing field."
The company's two chief investors took the role of underwriters,offering to buy any stock that wasn't purchased by othershareholders. The two investors are Microsoft Corp. chairman BillGates, who owned 7.5 percent of ICOS stock before the offering, andGeorge Rathmann, ICOS' chairman, president and CEO, who owned6.5 percent.
Fitzpatrick said the company would not reveal how much new stockGates or Rathmann purchased, or their new stakes. But she said,"The participation from our shareholders was very strong."
ICOS now has about 32 million shares outstanding. The companyreported cash and equivalents of about $27.4 million on Sept. 30,and a net loss of nearly $6 million for the quarter.
The company's lead product is a monoclonal antibody, Hu23F2G,that is in Phase I trials for treatment of multiple sclerosis. Fitzpatricksaid the trial, involving 20 to 30 patients, should end next October.Patients initially will get a single dose intravenously; later,multidoses will be administered.
"We want to show it stops trafficking of the leukocyte from theblood vessel into the brain tissue," Fitzpatrick said. "Based on whatwe saw in our animal studies, the lesions would diminish and clinicalsigns would improve."
The monoclonal antibody is part of ICOS' cell adhesion program,which also includes intercellular adhesion molecules (ICAM).ICAM-3 is in preclinical studies in organ transplantation, and ICAM-4 is being studied in neurological diseases. The latter, Fitzpatricksaid, may be a bridge between the central nervous and immunesystems.
The company's signal transduction program, being developed withLondon-based Glaxo Holdings plc, centers around phosphodiesteraseinhibitors. Compounds are in exploratory development and researchstages for hypertension and asthma indications, respectively. Glaxo,which provides the chemistry, and ICOS, which offers the biology,are each paying their own development costs. They would sharepromotional rights.
Another ICOS program is in antagonists of proinflammatorymediators.
Fitzpatrick said a strong candidate in that program is PAF-AH, orplatelet activating factor-acetylhydrolase. The naturally occurringenzyme, which itself is the product, has been cloned andcharacterized by ICOS. Some preclinical work on the enzyme isbeing done in asthma.
The company's 1995 goals include: finishing the Phase I trial ofHu23F2G; defining an investigational new drug candidate for ahumanized antibody to ICAM-3; starting a clinical study on aphosphodiesterase inhibitor; starting a clinical study on PAF-AH;expanding in-house small-molecule screening; and identifying a newcorporate partner. n
-- Jim Shrine
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