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Based in Mountain View, California, ChemoCentryx (CCXI) scheduled a $60 million IPO with a market capitalization of $510 million at a price range mid-point of $15 for Wednesday, February 8, 2012.

CCXI is one of nine IPOs scheduled for this week (see our IPO calendar).

SUMMARY

CCXI is a biopharmaceutical company focused on discovering, developing and commercializing orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer.

CONCLUSION

However, CCXI needs to finish stage 2 clinical trials then move on the stage 3. Although the future appears promising, CCXI is risky at this stage, even though it has a strategic partnership with GlaxoSmithKline (GSK), which began in 2006. Read more on page F-17

BUSINESS

CCXI is a biopharmaceutical company focused on discovering, developing and commercializing orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer.

CCXI's approach has been to target the chemokine system, a network of molecules including chemokine ligands and their associated receptors, as well as related chemo-attractant receptors, all of which are known to drive inflammation. Chemokine ligands concentrate at the site of an inflammatory event, serving as signals that attract and guide inflammatory cells to the tissue, where, based on the chemokine ligand and receptor combination, a specific inflammatory response is initiated.

COMPETITION

The biotechnology and pharmaceutical industries are highly competitive, and CCXI faces significant competition from companies in the pharmaceutical, biotechnology and other related markets that are researching and marketing products designed to address IBD, chronic kidney disease, including diabetic nephropathy, rheumatoid arthritis, other autoimmune diseases and inflammatory disorders, and cancer.

Established pharmaceutical companies that currently sell or are developing drugs in CCXI's markets of interest include, for example, Abbott (ABT), Amgen (AMGN), AstraZeneca (AZN), Biogen Idec (BIIB), Bayer (OTCPK:BAYRY), Elan (ELN), GlaxoSmithKline , Johnson & Johnson (JNJ), Merck (MRK), Merck Serono, Takeda (OTCPK:TKPHF), Novartis (NVS), Pfizer (PFE), Reata, Sanofi-aventis(SNY) and Teva (TEVA).

Pharmaceutical and biotechnology companies which are known to be involved in chemokine research and related drug development include Pfizer, GSK, Bristol-Myers Squibb (BMY), Merck, Takeda, Sanofi-Aventis, Incyte (INCY), and UCB Pharma among others.

CCXI is also developing small molecule therapeutics that will compete with other drugs and alternative therapies that are currently marketed or are being developed to treat IBD, chronic kidney disease and diabetic nephropathy, rheumatoid arthritis, other autoimmune diseases and inflammatory disorders, and cancer.

If approved for marketing by the FDA, Traficet-EN, CCXI's lead IBD drug candidate, would compete against existing IBD treatments such as Remicade, Humira, and other TNF-a inhibitors, immunomodulatory drugs and corticosteroids and potentially against other novel IBD drug candidates that are currently in development.

USE OF PROCEEDS

CCXI expects to net $53 million from the IPO from sale of four million shares. CCXI also expects to receive $7.0 million from the sale of shares of common stock in the concurrent private placement to GSK and $5.0 million from the sale of shares of common stock in the concurrent private placement to Techne, each at a price per share equal to the initial public offering price.

  • $25.0 million to further develop CCX140, including the completion of the two Phase II clinical trials in diabetic nephropathy and additional Phase I clinical trials and related activities in anticipation of conducting end-of-Phase II meetings with the FDA and EMA;
  • $10.0 million to advance CCX168, CCX832 and CCX662 through Phase II clinical proof-of-concept;
  • $10.0 million to fund research and drug discovery activities related to additional drug candidates; and
  • Remainder for working capital and general corporate purposes.
Source: IPO Preview: ChemoCentryx