IPO pricing now scheduled for 17 March 2004
TERCICA INC filed this S-1/A on 03/03/2004
PROSPECTUS SUMMARY
You should read the following summary together with the entire prospectus, including the more detailed information in our financial statements and related notes included in this prospectus. You should carefully consider, among other things, the matters discussed in “Risk Factors.”
TERCICA, INC.
We are a biopharmaceutical company focused on the development and commercialization of recombinant human insulin-like growth factor-1, or rhIGF-1, for the treatment of short stature, diabetes and other endocrine system disorders. We are in the development stage, have a limited operating history and may not be able to generate revenue or attain profitability. Since our inception, we have not generated any revenue from operations and have a history of significant losses, including a net loss of $25.4 million during the year ended December 31, 2003. As of December 31, 2003, we had an accumulated deficit of $78.5 million. Given that we expect to incur substantial net losses to commercialize rhIGF-1, it is unclear when, if ever, we will become profitable. We also will not be able to commercialize rhIGF-1 if we do not receive regulatory approvals in the U.S. or in foreign countries, and we have not yet received any regulatory approvals.
The endocrine system regulates metabolism through the use of hormones, including IGF-1. IGF-1 is a naturally occurring hormone that is necessary for normal human growth and metabolism. A deficiency of IGF-1 can result in short stature, which is characterized by children being shorter than approximately 97.5% of normal children, and can lead, in children and adults, to a range of other metabolic disorders. These metabolic disorders can include lipid abnormalities, decreased bone density, obesity and insulin resistance. We licensed Genentech, Inc.’s rights to develop, manufacture and commercialize rhIGF-1 for a broad range of indications, including for short stature worldwide and diabetes in the U.S. We have Phase III clinical trial data for rhIGF-1 for our first short stature indication, Severe Pediatric IGFD. We intend to submit a New Drug Application, or NDA, to the FDA by early 2005 after completing validation of our rhIGF-1 manufacturing process at our contract manufacturer.
The cellular production of IGF-1 is regulated by growth hormone. Growth hormone deficiency, or GHD, leads to inadequate IGF-1 production which results in short stature in children. Growth hormone replacement therapy, which increases IGF-1 levels, can often be used to successfully treat GHD. However, we believe many individuals have normal growth hormone secretion, but because their cells do not respond normally to growth hormone, they are IGF-1 deficient and suffer from short stature. Individuals with this condition, which we refer to as IGFD, are candidates for rhIGF-1 replacement therapy. Our product candidate, rhIGF-1, is identical to naturally occurring human IGF-1, and we believe it performs the same functions in the body.
We have Phase III clinical trial results from the treatment of 65 children with Severe Pediatric IGFD with rhIGF-1 replacement therapy for an average of 3.5 years, with some patients being treated for as many as 10 years. None of the 65 patients discontinued rhIGF-1 treatment due to safety concerns. Of these children, 48 have completed at least one year of rhIGF-1 replacement therapy, which is the generally accepted length of time required to adequately measure growth responses to drug therapy. A statistically significant increase in average growth rate from 2.6 cm per year prior to treatment to 8.0 cm per year after the first year of rhIGF-1 treatment was demonstrated in these patients (p<0.0001). A p-value of less than 0.0001 means that the probability that these results occurred by chance was less than 1 in 10,000. A probability of 5 in 100 or less, or p<0.05, is considered to be statistically significant. Compared to pre-treatment growth rates, statistically significant increases were also observed during each of the next 5 years of rhIGF-1 treatment (p<0.001). We believe the magnitude of these increases in growth rate were clinically meaningful and comparable to those observed in clinical trials of approved growth hormone treatments. Statistically significant increases in height standard deviation score, or Height SDS, were also observed during each of the first 6 years of rhIGF-1 treatment (p<0.001).
We have had discussions with the FDA regarding the use of rhIGF-1 in Severe Pediatric IGFD. We believe that our clinical data supports the submission of an NDA for long-term rhIGF-1 replacement therapy in Severe Pediatric IGFD. We are currently planning a 200-patient Phase III rhIGF-1 clinical trial in children with Pediatric IGFD, which includes children with a less severe form of IGFD, and plan to initiate additional late stage clinical trials for other indications.
We have completed the transfer of Genentech’s proprietary manufacturing technology to our contract manufacturer and are establishing the process for high yield, commercial scale manufacturing. We have manufactured our rhIGF-1 on a small-scale production basis and, based on preliminary tests, we currently believe that our rhIGF-1 is comparable to the rhIGF-1 previously manufactured by Genentech and used in our Phase III clinical trials for Severe Pediatric IGFD. We have begun running the manufacturing process at full-scale. After the full-scale manufacturing process has been validated, we intend to submit an NDA for Severe Pediatric IGFD in early 2005.
Approximately one million children in the U.S. have short stature and we believe that there are an equal number of children with short stature in Western Europe. We believe that approximately 60,000 children in the U.S. and Western Europe have Pediatric IGFD and may be successfully treated with rhIGF-1 replacement therapy. This represents an approximate $1.0 billion annual market opportunity. We believe that Severe Pediatric IGFD constitutes approximately 20%, or 12,000, of the total population with Pediatric IGFD and represents an approximate $200 million annual market opportunity in the U.S. and Western Europe.
Indications
We intend to develop and commercialize rhIGF-1 to treat the following indications:
Severe Pediatric IGFD
Phase III completed; NDA planned for early 2005 Worldwide
Pediatric IGFD
Phase III trial planned for late 2004 Worldwide
Adult IGFD
Phase II trial planned for early 2005 Worldwide
Type A diabetes
Phase II trial planned for late 2004 U.S.
Type 2 diabetes with Severe Insulin Resistance
Phase II trial planned for early 2005 U.S.
Strategy
Our goal is to capitalize on the opportunities presented by rhIGF-1, and to develop and commercialize additional new products for the treatment of endocrine disorders. Key elements of our strategy for achieving these goals include:
Seek FDA approval of rhIGF-1 for Severe Pediatric IGFD;
Expand our Severe Pediatric IGFD indication to all children with IGFD;
Develop rhIGF-1 for additional indications;
Establish a U.S. sales and marketing organization; and
Broaden our portfolio of endocrine-related products. |
