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By Stacy Lawrence
Senior Writer [source: BioCentury]
In June 2004, Immuno-Designed Molecules SA pulled its proposed 99 million ($119 million) IPO on Euronext in Paris when French investors proved uninterested. The cancer immunotherapy company concluded that the only way to gain access to capital was to reverse merge into a public U.S. company. Three years on, founder and CEO Jean-Loup Romet-Lemonne is leaving the company with some lessons for other companies considering similar choices.
Last week, IDMI announced Romet-Lemonne was leaving in the wake of an FDA panel’s 12-2 vote against recommending approval of the company’s Junovan mifamurtide to treat newly diagnosed high-grade osteosarcoma.
But the company’s situation also seemed bleak in 2004.
"No one was buying in France," Romet-Lemonne told BioCentury. "Going onto the Nouveau Marche you needed to have covering the a certain percent of buyers that were French. But no one understood biotech in France."
Indeed, no French biotechs launched IPOs on Euronext from late 1999 to late 2005. Although five French drug development companies subsequently have debuted on Euronext, in 2004, Romet-Lemonne saw his options as either waiting for increased investor appetite in France or merging with a company that was already listed.
Prior to the proposed IPO, IDM had offered to acquire antibody company Oxford Glycosciences plc, listed on the LSE and NASDAQ, but was outbid by Celltech Group plc, which paid £101.4 million ($159.2 million) (see BioCentury, April 21, 2003).
Romet-Lemonne then looked across the Atlantic and concluded a reverse merger with infectious disease and cancer company Epimmune Inc. in August 2005, hoping that a U.S. listing would improve the company’s access to capital.
In addition, Romet-Lemonne had seen Epimmune’s early-stage science as a good fit, and indeed had reached a 2002 licensing agreement to access Epimmune’s technology. Both companies also had offices in the San Diego area (see BioCentury, Oct. 21, 2002).
Since then, the now Americanized Immuno-Designed Molecules Inc. raised $12.9 million in a PIPE in February on top of $12.3 million collected through the January 2006 sale of Epimmune’s infectious disease assets to Pharmexa A/S (CSE:PHARMX, Horsholm, Denmark).
But in hindsight, Romet-Lemonne said Epimmune lacked two essential ingredients: cash and analyst coverage. At the time of the merger, the public company had only $5 million in cash.
In addition, Epimmune’s share price had eroded from around $2 at the time the deal was announced to below $1 by the time the merger was done. This forced IDMI to execute a reverse split to meet NASDAQ’s requirement for a first-day share price higher than $5. That reduced the number of shares from 80 million to 13 million. The result, Romet-Lemonne noted, was "you have no volume."
If he had it to do again, Romet-Lemonne would hold out for a reverse merger with a company "with more cash and analyst coverage."
"CancerVax was the perfect candidate, they were involved in immunotherapy like we are,"said Romet-Lemonne." They were loaded with cash and had three analysts covering them. That would have been the best move."
Micromet AG, another European transplant from Germany, did a reverse merger into CancerVax Corp. to form Micromet Inc. (MITI, Carlsbad, Calif.) just a few months after the IDMI deal was finalized (see BioCentury, Jan. 16, 2006).
"We could have waited a little bit more," concluded Romet-Lemonne.
Romet-Lemonne is being succeeded by Timothy Walbert, previously EVP of commercial operations at NeoPharm Inc. (NEOL, Waukegan, Ill.).
Walbert will have two immediate challenges: dealing with the future of Junovan and fixing IDMI’s cash situation.
IDMI acquired Junovan in 2003 from Jenner Biotherapies Inc., which went out of business. The NDA was based on a Phase III study conducted by a pediatric cooperative, the Children’s Oncology Group. The trial was never meant to be the basis of a regulatory filing. Although the study was powered to measure disease-free survival, DFS was not clearly defined as the primary endpoint.
IDMI had hoped for approval based on sufficiently compelling benefit in osteosarcoma, an Orphan indication, but FDA’s Oncologic Drugs Advisory Committee concluded that the company had failed to provide "substantial evidence of efficacy" (see BioCentury, May 14).
With a PDUFA date of Aug. 25, IDMI is working to collect additional survival data. In advance of the committee meeting, Walbert said FDA was presented with an analysis from a Phase III trial of patient survival through 2003. Submitting survival data through 2006 to both FDA and EMEA, where Junovan is also under review, is now the top priority. The company plans to do so after raising the percentage of patients with follow-up to 95% from 80%.
Walbert is hoping that providing these additional data in addition to "properly contextualizing existing data" will be sufficient for an approval.
With $18.5 million in cash at March 31, IDMI only has enough to reach about 2Q08 at the current burn rate, according to CFO Robert De Vaere. IDMI is hoping to fundraise again on the back of good news from Junovan, but Walbert said that if FDA requires a new trial, "we’d have to evaluate our resources." |
