Pharma

No IPO for immunotherapy company Argos Therapeutics

Immunotherapy company Argos Therapeutics has pulled back on its plans for an initial public offering […]

Immunotherapy company Argos Therapeutics has pulled back on its plans for an initial public offering and leaves it needing to find another way to finance phase 3 clinical trials for its novel kidney cancer treatment.

In a letter filed with securities regulators, Argos simply said that it was withdrawing its registration statement “due to market conditions.” Durham, North Carolina-based Argos had expected to raise more than $65 million to finance development of its kidney cancer immunotherapy, along with its drug pipeline of candidates being developed to treat lupus and inflammatory conditions.

But the public markets have remained cool to life science IPOs. Merrimack Pharmaceuticals, a a Cambridge, Massachusetts firm developing cancer treatments, last month postponed its $80 million IPO. Chapel Hill, North Carolina-based Cempra Pharmaceuticals, which is developing antibiotic compounds to fight drug-resistant bacteria, did go public in February, but only after shaving its $78 million target down to $50 million — enough to devote the bulk of the proceeds to just one of two phase 3 candidates.

Even if Argos raised $65 million from an IPO, that amount would not be enough for phase 3 clinical trials on lead compound AGS-003, an experimental kidney cancer treatment. Argos estimates it needs $85 million to complete phase 3 studies. Just $30 million of IPO proceeds were intended to go toward AGS-003 phase 3 studies with the rest used as working capital.

Argos’ technology, called Arcelis, works by prompting the immune system to fight disease. Renal cell carcinoma is the most common form of kidney cancer and it’s Argos’ first target. Arcelis uses a sample of the tumor and the patient’s own dendritic cells to create antigen to fight the cancer. The company believes that the U.S. Food and Drug Administration’s approval of Dendreon‘s (NASDAQ:DNDN) prostate cancer treatment Provenge, an active immunotherapy, blazes a regulatory pathway for other active immunotherapies.

The U.S. Food and Drug Administration last month signed off on a special protocol assessment for AGS-003. Under this process, the FDA reviews the design of the planned clinical trial to determine whether it is enough to support a regulatory filing. It doesn’t guarantee approval, but it’s supposed to streamline a drug’s path. Argos had planned to start enrolling patients in the phase 3 study in the second quarter.

Now, venture capital-backed Argos must find another way to finance the phase 3 studies, either by turning again to its investors or by seeking a partnership with a pharmaceutical company. Prior to filing its IPO plans last July, CEO Jeff Abbey said the company had been in talks with companies interested in possible partnerships to develop and commercialize Argos’ technology. If Argos’ investors are tapped out, a Big Pharma partnership might be the company’s best bet to proceed with clinical trials on its drug candidates.

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