West Lafayette, Indiana, biopharmaceutical company Endocyte Inc. hopes to raise more than $86 million from an initial public offering of stock.
The company that develops small-molecule drug “conjugates” to treat cancer and inflammatory diseases this evening filed a statement with the Securities and Exchange Commission to register its IPO shares. RBC Capital Markets and Leerink Swann LLC would manage the proposed offering, and Wedbush PacGrow Life Sciences and Baird would co-manage it, Endocyte said in a release.
It would use proceeds of the offering to pay for ongoing clinical trials, repay debt and develop its drugs. Many start-up drug companies have turned to IPOs to take their products to market, but the U.S. IPO market has been rocky with some companies cutting their prices or delaying their offerings, according to Dow Jones Newswire.
Endocyte’s small-molecule drug conjugates “actively target receptors that are over-expressed on diseased cells,” the company said in its registration statement. This targeting enables patients to be treated with highly active drugs or high doses of drugs more frequently and over longer periods of time.
The company also is developing companion imaging diagnostics for its conjugates that could identify patients who are more likely to benefit from targeted treatments. The combination of drug and imaging diagnostic is a kind of drug-guidance system and an example of personalized medicine, which business consultancy PricewaterhouseCoopers says will transform the healthcare industry.
Endcyte’s lead conjugate, EC145, targets the folate receptor, which often is over-expressed in solid-tumor cancers that are hardest to treat, such as ovarian, non-small cell lung, breast, colorectal, kidney and endometrial. The company has done clinical trials for EC145 in ovarian and non-small cell lung cancers.
Endocyte is still developing its drugs, so the company’s revenues come solely from licensing fees, milestone payments and government grants. The company had no revenue in the first six months of both 2010 and 2009. In all of 2009, the company had $3 million in revenue and lost $15.7 million from operations. On June 30, Endocyte had assets of $11.8 million and liabilities of $6 million.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
In October, the company raised $26 million to complete a study of its ovarian cancer treatment for women who are resistant to chemotherapy. At that time, Endocyte had nine cancer drugs in development.
Sanderling Ventures, Burrill & Co., American Bailey Ventures, Blue Chip Venture Co. and Triathlon Medical Ventures were joined by Clarian Health Ventures in the October round. A year ago, the company said it received a milestone payment from a partnership with Bristol-Myers Squibb.
Endocyte has raised about $90 million in equity, thus far.
