Sparta Pharmaceuticals Inc. said it hopes to raise $9.8 millionin an initial public offering filed with the Securities andExchange Commission last week.
The company announced that it is proposing to offer up to 1.8million shares of common stock, including 240,000 shares tocover overallotments, at $7-8 per share. Sparta of Durham, N.C.,said in its prospectus that it expects net proceeds to beapproximately $9.8 million, assuming an initial public offeringprice of $7.50 per share and taking into account underwritingdiscounts and offering expenses.
RAS Securities Corp. of New York is the managing underwriterfor the offering.
After its IPO Sparta will have 5.2 million shares outstanding.As of Oct. 31 the company had $1.7 million in cash. In its lastprivate placement, completed in November, Sparta raised $3.9million from the placement of convertible notes.
The early-stage pharmaceutical company is acquiring rights toand developing technologies and drugs for the treatment ofcancer and viral diseases. Sparta has two drug-deliverytechnologies, Spartaject and L.A.D.D. (Liver Associated DiseaseDelivery) technology. The company sublicensed the Spartajecttechnology from Research Triangle Pharmaceuticals Ltd., whichlicensed it from Pharma Logic Inc. Sparta obtained rights to theL.A.D.D. technology under an exclusive worldwide licensingagreement with Yale University.
Spartaject is intended to improve the delivery ofchemotherapeutics either currently marketed or underinvestigation for treatment of tumors and blood-borne cancers.It is also being tested for delivery of previously studiedcompounds whose development may have been halted becauseof solubility problems. Sparta said the delivery systemaccommodates compounds that are poorly water soluble orwater insoluble by encapsulating them with a fatty(phospholipid) layer that permits the creation of a suspensionof the drug rather than a solution and intravenous injectionwithout the use of potentially toxic solubilizing agents.
The Spartaject system is in preclinical development for usewith an intravenous form of busulfan (an oral dosage form ismarketed by Burroughs Wellcome Co.) and for use withtaxanes. The company also plans to study the technology withetoposide, aphidicolin or aphidicolin glycinate to increase theeffect of cisplatin, carboplatin and camptothecin.
The L.A.A.D. system involves administering an inactivecompound, a prodrug, which passes through the body and isconverted in the liver by an enzyme into an active agent. Thegoal of the technology is to adjust the dosage of the prodrug sothat either appropriate therapeutic levels of the activeingredient remain in the liver for targeted treatment or higherlevels of the activated drug pass out of the liver to providechemotherapy throughout the body. Sparta is studying thetechnology in preclinical trials with the nucleoside analog IPdRand 5-FP, a prodrug that converts into 5-fluorouracil.
Separate from its delivery technologies, Sparta is developingthree anti-cancer compounds and three anti-virals. One of thecompounds, CI-921 (also referred to as amsalog), is in Phase Iclinicals in Britain for the treatment of lung and breast cancers.Sparta noted that in prior clinical trials by others thecompound has shown borderline activity. However, thecompany said it believes a different approach to dosing maysignificantly enhance the drug's efficacy and that the use ofgrowth factors (which increase white blood cell count) maypermit more aggressive use of CI-921 by reducing one of thecompound's side effects.
The drug is being developed with the Cancer ResearchCampaign (CRC) in London; Sparta licensed CI-921 from CRCaffiliate Cancer Research Campaign Technology Ltd. Sparta alsosaid CRC is developing a reformulation of the compoundbecause of the incidence of vein inflammation that isapparently caused by the drug.
The company also licensed an anti-folate, PT-523, from Dana-Farber Cancer Institute, where it is in preclinicals for breast,lung and possibly other cancers. Sparta said another drug, RIIretinamide, has shown activity for treatment ofmyelodysplastic syndromes (MDS) in clinical trials conducted inChina by the Institute of Materia Medica in Beijing, whichlicensed the drug to Sparta. Sparta said it plans to file aninvestigational new drug (IND) application for RII retinamidebased on data from the trial in China. FDA has granted RIIretinamide orphan status for treatment of MDS.
The company also plans to study applications of its L.A.D.D.technology with aphidicolin or aphidicolin glycinate, RIIretinamide and liver activated compounds for treatment ofviral diseases.
Sparta said it has retained a contract drug-developmentcompany to conduct preclinical and clinical trials. It plans tomarket its products with its own future sales force and co-marketers or through distributors, licensees or strategicpartners.
Sparta's co-founder, chairman, president and chief executiveofficer, William Sullivan, was chairman, president and CEO ofBurroughs Wellcome Co. from 1981 to 1986. William McCulloch,formerly U.S. Bioscience Inc.Us vice president of clinical researchand development, is Sparta's senior vice president of researchand development. The company's board of directors includesPeter Barton Hutt of the Washington, D.C., law firm of Covington& Burling, and Charles O'Brien, formerly chief operating officerof Ciba-Geigy Corp.
-- Brenda Sandburg News Editor
(c) 1997 American Health Consultants. All rights reserved.