Pharma IPO: Highlights from ActivBiotics' S-1 Filing

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Includes: AGIX, DCGN, KOSP, SNY
by: Evelyn Rubin

Last week, ActivBiotics filed for a Nasdaq IPO. Below are highlights excerpted from the company's S1 filing:

Proposed Ticker: (ACTV)

Underwriters: HSBC, Needham, BMO, Susquehanna

Maximum Offering: $46 million

Business Overview:

We are a biopharmaceutical company focused on the discovery, development and commercialization of therapies for the treatment of inflammatory diseases and bacterial infections. Our lead product candidate, Rifalazil, is a proprietary, orally administered antibacterial agent, which is in a Phase III clinical trial for the treatment of intermittent claudication associated with peripheral arterial disease, or PAD. PAD is a result of atherosclerosis of the arteries of the lower extremities. Intermittent claudication is pain, cramping or fatigue in the lower extremities brought on by exertion or walking and is the most common symptom of PAD. Our second product candidate, M40403, is a proprietary small molecule that is designed to mimic the function of a naturally occurring enzyme, which plays a role in several inflammatory disease states. We plan to initiate a Phase II clinical trial of M40403 for the management of post-operative ileus, or POI, which is the temporary impairment of bowel function following surgery. In addition to our clinical programs, we continue to focus our research efforts on identifying product candidates for the treatment of inflammatory diseases and bacterial infections from our proprietary compound libraries. We currently hold worldwide commercial rights to all of our product candidates.


Financial Highlights:
The company is a development stage company, with zero revenues since inception in October 1996. The company has spent $78 million in OPEX over the last ten years, growing OPEX from $15 million in 2004 to $22.7 million in 2005. For the first quarter of the year, OPEX grew from $4.2 million to $4.7 million between 2005 and 2006. As of the end of March, the company had close to $16 million of cash, and no long term debt.

Use of Proceeds: Funding clinical trials, R&D and general corporate purposes.

Key Competitors:
Some of the potential competitive solutions include:

  • KOS Pharmaceuticals (KOSP) and Takeda Pharmaceuticals may expand current product Advicor to include intermittent claudication.
  • Companies with therapeutics for PAD under development include Genzyme (GENZ), Atherogenics (AGIX), and deCode Genetics (DCGN).
  • Companies with possible label expansions for Carotid Artery Atherosclerosis include Kos Pharmaceuticals (KOSP), AstraZeneca (NYSE:AZN), and Pfizer (NYSE:PFE).

Management:

Steven C. Gilman, Ph.D., has served as our President and Chief Executive Officer, and as a director since March 2004. He has also served as President of ActivBiotics (Canada) Inc. since January 2005. From October 2000 to March 2004, Dr. Gilman held various senior management positions at Millennium Pharmaceuticals, Inc., including Vice President and General Manager, Inflammation. From November 1994 to September 2000, Dr. Gilman held a number of positions in the Global Research and Development division of Pfizer Inc., including Group Director of respiratory, allergy, immunology, inflammation and infectious diseases. He received his B.A. degree from Miami University (Ohio) and his M.S. and Ph.D. degrees in microbiology from Pennsylvania State University. Dr. Gilman completed a post-doctoral research fellowship at the Scripps Clinic and Research Foundation and currently serves on the board of the Massachusetts Biotechnology Association.

Ownership: Healthcare Ventures is the largest shareholder with 33.3% of the company today. Additional funds invested in the company include Advent (9%), MDS Capital (8.3), Delphi Ventures (7.4%), VenGrowth Advanced Life Sciences Fund (5.9%), and Canadian Medical Discoveries Fund (5.9%). The CEO holds 1.5%.