Sphinx Pharmaceuticals Corp. on Thursday said it raised $75million through an initial public offering of 5 million shares ofcommon stock at $15 per share, bringing to $176 million theamount poured into IPOs this week.
Sphinx was the third IPO this month to sell more shares at ahigher price than originally proposed. The Durham, N.C.,company had proposed to sell 3 million shares for $10 to $12.The stock (NASDAQ:SPHX) closed at $15 in its first day oftrading Thursday.
Gilead Sciences Inc. (NASDAQ:GILD) sold 5 million shares plus a750,000-share overallotment at $15, after proposing to sell 3million shares at $12 to $14. Amylin Pharmaceuticals Inc.(NASDAQ:AMLN) sold 4 million shares at $14, after proposingto sell 3 million shares at $9 to $11.
But some analysts said Sphinx, which is developing drugs basedon the role of cell membrane lipids in regulating cellularprocesses, isn't in the same league as the other two.
"I wouldn't throw Gilead and Amylin into the same category asSphinx," said Alex. Brown & Sons. Inc. analyst Amy Berler.Amylin has interesting science behind it, while Gilead has theright package, said Berler.
"Gilead deserved the run-up it got Wednesday," said LarryBloom, an analyst at SoundView Financial. "When it camepublic it was a mini-Microsoft."
With a volume of more than 5 million shares on Thursday,Berler said, traders may have bought Sphinx to flip it -- to buyand immediately sell the shares.
After the minicorrection in November, investors wantedcompanies in clinical trials, Bloom said. But some portfoliomanagers entered the new year with 30 percent or 40 percentcash and are looking for new names in which to invest theirmoney. Some companies now going public should really besecond-round venture deals, Bloom cautioned.
After the offering, Sphinx has 12 million shares outstanding.Shearson, Lehman Bros. Inc. and Oppenheim & Co. Inc. have a750,000-share overallotment option.
The company is developing drugs, based on lipid secondmessengers, to control a family of enzymes called proteinkinase C. PKCs play a key role in regulating cellular functionssuch as cell proliferation, platelet aggregation and white bloodcell activation. Lipid second messengers, so called becausethey're released inside the cell, regulate the PKCs.
Sphinx plans to file investigational new drug applications thisyear to begin Phase I trials of PKCs to treat psoriasis and solidtumors. Sphinx and Eli Lilly and Co. are developing PKCcompounds to treat cardiovascular diseases, inflammatorydisorders and central nervous system diseases.
Pharmaceutical companies have been working on PKCs forsome time with little success, said Berler and Vector SecuritiesInternational analyst Peter Drake. In addition, several patentshave been filed on different kinds of PKCs, and it's not clearthat any company will gain a competitive advantage, Berleradded.
According to both Berler and Sarah Gordon of AmerindoInvestment Advisors Inc., PKC is such a ubiquitous internalmessenger that any interference could have undesired sideeffects. "It's a little bit like saying you want to mess with thewater molecules in the body," Berler said. "You need exquisitesensitivity."
Earlier this week, IPOs by Gilead and Deprenyl USA Inc.(NASDAQ:DUSAU) raised $86 million and $15 million,respectively.
-- Karen Bernstein BioWorld Staff
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