The Burrill Report


Going public is difficult for biopharmaceutical companies in today’s uncertain market. In the United States, Seattle biotech Allozyne will become a public company soon, not through an initial public offering, but by entering into a reverse merger with San Francisco-based Poniard Pharmaceuticals, which is already listed on the Nasdaq market.

Poniard will issue shares of its common stock to Allozyne whereby Allozyne’s stockholders will own approximately 65 percent of the combined company, which will be renamed Allozyne Inc. and be headquartered in Seattle. Meenu Chhabra, president and CEO of Allozyne, will continue in those positions in the new company.

The merger will bring together Allozyne’s autoimmune disease pipeline and bispecific protein engineering platform and Poniard’s oncology assets, including picoplatin, a late-stage platinum-based chemotherapeutic for which the combined company will seek a partner.

“We view this merger as a critical step in our goal of maximizing long-term value for our shareholders,” says Ronald Martell, Poniard’s CEO. Poniard failed to get U.S. regulatory approval for picoplatin, a goal it stopped pursuing in March 2010. It subsequently received Chinese regulatory approval in March 2011 to conduct two late-stage trials in the country in small cell lung cancer and ovarian cancer.

Chhabra said in a statement that the primary reason for the merger is to access the public markets to develop its lead product, AZ01, to treat multiple sclerosis into mid-stage trials and to advance another bispecific antibody with broad potential in autoimmune and inflammatory disease into the clinic.

In order for deal to close, Poniard must get approval to list the common stock of the combined company on the Nasdaq Capital Market and will need to complete a reverse stock split, subject to shareholder approval, to comply with the Nasdaq listing requirements.

Dutch diagnostics firm Agendia had hoped to raise as much as $110 million in an initial public offering this week, an offering that was being closely watched to gauge investor interest. However, the marketer of breast cancer tests pulled its offering just before it was due to list on Euronext in Amsterdam. Agendia cited volatile global capital market conditions for postponing its offering as European markets have been plagued by the Greek debt crisis and economic recovery has slowed in the United States.

“We are pleased by the response we have received from investors but current volatile and uncertain market conditions do not allow us to launch the transaction and achieve a smooth transition into the public markets,” says Bernhard Sixt, Agendia’s CEO. Agendia markets four breast cancer tests under the Symphony brand.

Backers of Boston-based Tesaro put up $101 million to fund the company’s series B venture round. The financing was lead by Kleiner Perkins Perkins Caufield & Byers, and included founding investor New Enterprise Associates and new investors InterWest Partners, T. Rowe Price, Pappas Ventures, Oracle Partners, Deerfield Management, and Leerink Swann. Tesaro was formed in May 2010 by New Enterprise Associates and former executives of MGI Pharma, a cancer company that was acquired by Eisai in 2008 for $2.9 billion. The company’s strategy is to acquire cancer compounds in mid- to late stage development and take them through to commercialization. The company has already in-licensed two products—rolapitant from Opko Health for the prevention of chemotherapy-induced nausea and vomiting, and small molecule inhibitors of the ALK enzyme that offer a targeted approach to certain cancer sub-populations [see story].

Ultragenyx Pharmaceutical, another year-old startup, closed a $45 million series A financing to support the development of rare disease therapeutics. The round was co-led by TPG Biotech and Fidelity Biosciences, who were joined by European investor HealthCap, and Pappas Ventures.

The funding will advance multiple rare disease product programs in the pipeline, as well as the development of new product candidates and partnerships. Ultragenyx lead compound, a first-in-class therapy for treatment of Hereditary Inclusion Body Myopathy, is expected to enter the clinic in 2011 [see story].





June 23, 2011
http://www.burrillreport.com/article-doing_what_it_takes%e2%80%94or_not.html