Scottish biotech Cyclacel joins IPO bandwagon
By Lara Smith
LONDON, July 2 (Reuters) - Scottish biotechnology firm Cyclacel plans to float on Nasdaq (NASDAQ: news) and the London Stock Exchange (LSE: LSE.L - news) , joining a growing number of young European healthcare companies coming to market, the cancer specialist said on Friday.
Cyclacel -- long touted as a candidate for an initial public offering -- said it planned to offer 16 million new shares, or 26 percent of the company's enlarged share capital, at an indicative price of between 152 and 180 pence each.
At the midpoint of the price range, the offering would raise 26.6 million pounds and value the company at about 110 million pounds.
This would represent around two years of cash resources, Chief Executive Spiro Rombotis said.
Cyclacel did not specify how many of the shares it would place in London and the United States. This would be decided on the day of pricing, likely next week, Rombotis said.
The planned listing underscores a trend of European biotech companies returning to stock markets after a three-year drought, although the reception has been mixed.
Britain's Ark Therapeutics (LSE: AKT.L - news) and Switzerland's Basilea both floated in March, but shares in the two companies are trading well below their offer price. Britain's Microscience and Immuno-Designed Molecules of France have delayed their IPOs due to a lack of investor interest.
Others, however, are pushing ahead. Germany's Epigenomics hopes to float this month, along with French diagnostics firm BioMerieux, which already has an established and profitable revenue base.
Dundee-based Cyclacel said it would use the proceeds to develop its clinical stage drugs and to advance its pre-clinical drug portfolio.
"We have the chance to be first to market in a massively important cancer field after Aventis (Paris: FR0000130460 - news) unexpectedly terminated its development of a similar class of drug," Rombotis told Reuters.
"We have to float now so our shareholders can reap the rewards of being first to market." He added the company would not have launched an IPO without strong indications of demand.
Cyclacel had discussed floating in 2003, but was put off by weak equity markets and poor sentiment towards new listings.
Rombotis expects Cyclacel's lead drug, to treat a rare form of blood cancer, to reach market as early as 2006. Its second drug hope, for lung cancer, could follow 12-18 months later.
"On the basis that most of these blood cancer patients will die -- the chances are 80-90 percent -- we could have potential for fast-track status," he said. This means faster regulatory review than usual if deemed a clinical necessity.
Morgan Stanley (NYSE: MWD - news) and SG Cowen will act as joint global coordinators and bookrunners for the offering.
(Additional reporting by Ben Hirschler) |
