The giant sucking sound you hear is generated by all the biotech companies pulling the plug on their intended IPOs. Almost a year to the day that it filed its registration papers, Mountain View, California-based ChemoCentryx become the latest company to join a growing list of companies that have scrubbed their planned IPOs. ChemoCentryx hoped to generate $57 million to further the development of a new class of small molecule drugs that target chemokine system, which plays a critical role in the body’s inflammatory response.

 

The company’s last raised money in August 2006 when it secured $17.7 million in a series C round of venture financing. At the same time, it picked up a $63.5-million upfront payment in cash and equity from GlaxoSmithKline as part of a worldwide strategic alliance. The deal involves multiple products and targets and could be worth up to $1.5 billion if all development and commercialization milestones are met.

 

 

ChemoCentryx earned a further $50-million milestone payment from GSK in August 2008 for progress in its small molecule CCR1 program. The milestone payment was triggered by the acceptance of ChemoCentryx’ orally bioavailable small molecule, CCX354, as a candidate for full development. CCX354 selectively inhibits the chemokine receptor known as CCR1, a validated target for the treatment of certain autoimmune diseases such as rheumatoid arthritis, as well as other inflammatory diseases.

 

The company’s lead product candidate, Traficet-EN (CCX282), targeting the CCR9 chemokine receptor, is in a Phase II/III clinical trial for the treatment of patients with moderate-to-severe Crohn’s disease, as well as in a mid-stage clinical trial for the treatment of patients with celiac disease. A second product candidate, CCX140, which targets the CCR2 chemokine receptor, is in an early-stage single-dose escalation trial. CCX354, a CCR1 antagonist, is its third product candidate in the clinic and is currently in a Phase I dose-escalation trial. Their fourth investigational new drug in clinical trials is CCX025, which is the second orally administered compound that inhibits the CCR9 chemokine receptor. This program is a part of the strategic alliance with GSK.

Chemocentryx is not alone. Companies are pulling the plug on their IPOs and turning to mergers, alliances and additional venture rounds instead. 

 

 

 

Urge To Merge

Earlier this month, Replidyne and Cardiovascular Systems agreed to merge in an all-stock transaction. Replidyne will issue new shares of its common stock to CSI shareholders, who will own 83 percent of the combined company.

 

In August, Replidyne suspended the development of its novel anti-infective programs based on bacterial DNA replication inhibition technology including its lead product candidate REP3123, an investigational narrow-spectrum antibacterial agent for the treatment of Clostridium difficile bacteria and C. difficile infection. The merger will turn Cardiovascular Systems into a public company without having to complete an public offering. The company filed to go public in January, with plans to raise $86.2 million. It withdrew its IPO in conjunction with the merger announcement. The agreement also gives Cardiovascular Systems access to between $35 million and $40 million in cash, the company says.

 

 

 

Phenomix, which is developing small molecule drugs to treat Type 2 diabetes and hepatitis C, entered into a partnership with Forest Laboratories to develop and commercialize dutogliptin (PHX1149) in North America. Dutogliptin is Phenomix’ dipeptidyl-peptidase-4 or DPP-4 inhibitor currently undergoing late-stage clinical development in Type 2 diabetes mellitus. These inhibitors prevent DPP-4 from breaking down the incretin hormone glucagon-like peptide 1 (GLP-1), thereby increasing the levels of this hormone in the digestive tract and the blood. The increased levels of GLP-1 stimulate insulin production by the pancreatic beta cells and reduce glucagon production by the pancreas, both of which result in reduced blood glucose levels.

 

Forest will make an upfront payment to Phenomix of $75 million, but Phenomix could receive up to $340 million in upfront and milestone payments for the successful development and commercialization of dutogliptin in the United States over the term of the collaboration. The two companies will jointly develop and commercialize dutogliptin in the United State, and the companies will equally share profits and expenses. Upon commercialization, the companies will co-promote the product in the United States, with Phenomix promoting dutogliptin to endocrinologists and diabetologists and Forest promoting to primary care and specialty physicians. Forest has exclusive rights to develop and commercialize dutogliptin in Canada and Mexico, and Phenomix will receive a royalty on sales in these countries in exchange for the rights to use jointly funded trial data in those countries. Phenomix retains development and commercialization rights to the product outside of North America, and will pay Forest a royalty on net sales in these territories.

 

 

 

 

Light Sciences Oncology, a privately held company developing Light Infusion Therapy to treat cancer and other conditions, raised $40.1 million in a series C round of financing. The company plans to use the funds in the continued development of Light Infusion Therapy, which includes two ongoing late-stage clinical trials in patients with hepatocellular carcinoma and metastatic colorectal cancer, a planned late-stage trial in glioblastoma multiforme, a form of brain cancer, and early stage clinical trials in benign prostatic hyperplasia or BPH.

 

Zogenix closed an $18-million secured loan facility with Oxford Finance and CIT Healthcare. Zogenix will use the proceeds to prepare for the potential launch of its first product, sumatriptan DosePro, for the treatment of acute migraine. DosePro is Zogenix’ novel needle-free, pre-filled, single-use delivery technology for subcutaneous drug administration. Zogenix continues to scale-up its manufacturing capacity and build its sales and marketing capabilities in preparation for a targeted 2009 launch of sumatriptan DosePro, subject to the receipt of FDA approval.

 

Zogenix’ second product candidate, ZX002, is a novel, controlled release formulation of hydrocodone for the treatment of chronic pain. This company has completed mid-stage clinical trials, and it anticipates initiating a late-stage clinical program in the second half of 2008. The company also plans to license the patented DosePro drug-delivery system to other companies.

 

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