12:00 AM
Sep 18, 2006
 |  BioCentury  |  Finance

Ebb & Flow

When Amicus pulled its proposed IPO in July, the genetic disease company was hardly hurting for cash, as it had about $40 million in the bank. Nevertheless, Amicus was clearly ready to listen when existing investor New Enterprise Associates suggested a giant private round.

The result was last week's $60 million series D round, in which NEA put in half the money. Indeed, only one new investor - Och-Ziff Capital Management - joined existing investors Canaan Partners; CHL Medical Partners; Frazier Healthcare Ventures; Palo Alto Investors; Prospect Venture Partners; Quaker BioVentures; and Radius.

"There were a number of calls and interest from hedge funds, public market funds and private equity funds," President and CEO John Crowley told Ebb & Flow. "But we also could have filled the entire round with our inside investors. We decided to let in one new investor and wanted someone with significant experience in the public and private space."

Crowley declined to disclose the company's valuation, but did say that the series D was at a "significant step-up to the post-money on our previous deal." Last year, the company raised $55 million in a series C financing that valued Amicus at $125 million.

Amicus is focused on small molecule chaperones that bind to proteins that are misfolded because of a mutation. The lead compound, Amigal, is in Phase II testing to treat Fabry's disease. Phase III trials are expected to start next year.

Behind that, AT2101 is in Phase I testing for Gaucher's disease, while the company plans to file an IND this year for AT2220 to treat Pompe's disease.

Although Amicus didn't immediately need the cash infusion, Crowley noted the funds will allow the company to expand its research.

"We're doing lots of R&D to understand the role of chaperones outside of genetic diseases," he said. "We've started to build programs in neurology, oncology and metabolic disorders. Now, we have the funds to build therapeutic franchises using our technology in these areas."

The $100 million in cash should take the company into 2009. "Now we can design our own IPO window," Crowley said.

Rolling 3s

Vertex (VRTX) notched the second largest biotech equity deal this year. The small molecule developer raised $300.3 million in a bumped-up follow-on last Friday, selling 9.1 million shares at $33. The company proposed to sell 8 million shares last Monday, when its price was $34.82.

The financing lags only the $534.8 million follow-on sold by diabetes play Amylin (AMLN) in March.

After a very slow summer, the follow-on market is showing some life. In late August, cardiovascular company CV Therapeutics (CVTX) broke the dry spell with a $98.3 million offering.

CVTX's share price dipped about 8% between the time it filed and priced its deal. VRTX dipped about 5% between filing and pricing. The shares closed the week off $2.36 to $32.98. Underwriters were Merrill Lynch; Morgan Stanley; and UBS.

The next data point could be cancer company Cell Genesys (CEGE), which proposed on Sept. 7 to sell 5.8 million shares in a deal underwritten by Credit Suisse.

Good news travels faster

Genentech (DNA) lost $3.2 billion of market cap last week on news of a regulatory delay for an sBLA for Avastin to treat metastatic breast cancer. But those bemoaning the decline would do well to remember that good news for the antibody is more rewarding than the bad news is punishing.

Indeed, DNA added $12.9 billion of market cap last April, when the company announced positive Phase III data for Avastin in breast cancer (see BioCentury, April 18, 2005).

Last year's pop was part of the string of giant jumps related to good Avastin news. DNA's valuation swelled by $19 billion when the drug showed efficacy in a Phase III trial in colorectal cancer in May 2003 and tacked on an additional $6.6 billion when the anti-VEGF antibody was approved for that indication in February 2004.

In contrast, reaction to negative Avastin news has been more muted. For example, DNA actually posted a small gain in the last week of June, despite news that Avastin failed...

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