ChemoCentryx, a US-based molecular therapeutics company, set the range for the shares for its initial public offering (IPO) at between $14 and $16 on Monday, and is estimating that it will raise $60m from the offering of four million shares.
ChemoCentryx will raise an additional $12m from concurrent sales of common stock to two shareholders: pharmaceutical conglomerate GlaxoSmithKline and biotechnology company Techne.
In addition to its role as an equity investor in ChemoCentryx, Glaxo is also a strategic partner. The two firms signed a drug discovery agreement in 2006 that saw Glaxo provide an upfront payment of $63.5m, and a $5m milestone payment a year later.
Glaxo and Techne currently stand as ChemoCentryx’s two largest stockholders, holding 24.4% and 19.7% of the company’s shares respectively. Institutional shareholders also include healthcare investment firm OrbiMed Advisors (11.0%), venture capital (VC) firms HBM Bioventures (9.2%) and Alta Partners (6.5%), and VC family of funds HealthCap (6.4%).
Additional investors in ChemoCentryx, which has raised $129.4m over five rounds (not including Glaxo’s partnership funding above), are Belgium-based VC and private equity firm Gimv, institutional asset manager Jennison Associates, private equity firm Hanseatic and Swizterland-based private bank Pictet.
Underwriters for the offering are JP Morgan Securities, Citigroup Global Markets and Cowen and Company. The financial services companies will have the opportunity to buy 600,000 additional shares in ChemoCentryx should they wish.
The cash raised from the latest IPO will chiefly be used to advance clinical trials for four molecular drug candidates, with additional funds put aside for research towards further drug treatments. ChemoCentryx develops drugs to treat autoimmune diseases, inflammatory disorders and cancer.
Income from new drugs would certainly help ChemoCentryx’s balance sheet. The filing shows ChemoCentryx’s revenues have dipped year-on-year from 2011 to 2011, going from $21.7m to $5.6m over the nine months leading up to September. Losses have risen accordingly over the same period, from $8.2m to $22.8m.
The forthcoming offering is not the first time ChemoCentryx has attempted an IPO. ChemoCentryx previously filed in November 2007 to raise up to $57.5m only to withdraw the following November, citing unfavourable marketing conditions.
This time, ChemoCentryx will be closely examining the outcome of another biopharmaceutical IPO prior to its own. Verastem is set to raise $45m at a range of $9-$11 when it floats tomorrow and the initial direction of its share price could well influence the success of ChemoCentryx’s own.