BioWorld International Correspondent

One month after receiving a green light to move its cell therapy treatment for improving the outcomes of hematopoietic stem cell transplants into a Phase III clinical trial, MolMed SpA. is launching an initial public offering in which it is seeking up to €71.8 million (US$105.8 million).

As well as being among one of the largest biotechnology IPOs in Europe in the past couple of years, the transaction, if completed, also would represent the first biotechnology listing in Italy since Milan-based NovusPharma SpA. (now part of Seattle-based Cell Therapeutics Inc.) raised about €155 million in 2000. Since then, Italian drug developers such as Newron Pharmaceuticals SpA. and BioXell SpA., both of Milan, have opted for the Swiss Stock Exchange in Zurich.

MolMed, based in San Raffaele Science Park in Milan, plans to list its shares on the Mercato Telematico Azionario, the electronic share trading platform administered by Milan-based Borsa Italiana SpA. It is offering up to 26,116,952 new shares, including 3,917,543 shares to cover overallotments. It has set an indicative price range of €2.15 to €2.75. The offer opened Monday and will run through Feb. 28.

MolMed was spun out of the San Raffaele Scientific Institute in 1996 to commercialize research conducted by Claudio Bordignon, one of Europe's best known gene therapy researchers, who is also the company's CEO. It acquired another gene therapy firm, Milan-based GenEra SpA. in 2002, and so far has raised €76 million in private equity investment.

Despite the current gloomy outlook around the globe and in Italy - Siena-based Philogen SpA pulled an IPO in January, citing poor market conditions - several factors support the timing of the IPO, Bordignon told BioWorld International. "We think that the company right now is at a growth point in its value curve," he said.

Its lead program, TK, eliminates the need for T-cell ablation in hematopoietic stem cell transplants from partially compatible donors while reducing the risk of graft-vs.-host (GvH) disease by incorporating a suicide gene. The transplanted T-cells can be eliminated if GvH develops, but their anti-leukemia and anti-infection effects are captured before it does.

Although the company is conservatively forecasting a launch date of 2012, based on overall survival data, the European Medicines Agency (EMEA) has indicated that it could invoke its new conditional approval pathway on the basis of a second primary endpoint, based on frequency of GvH disease, the severity of the condition and progression from acute to chronic GvH disease. "In that case, it could come as early as 2009," Bordignon said. The EMEA has a high degree of familiarity with the program. "They have participated heavily in the design of the Phase III trial," he said.

The company also is extending the range of target indications for a second pipeline product, ARENEGYR, a fusion protein comprising a peptide that selectively binds a receptor expressed on newly formed tumor blood vessels and the cytokine tumor necrosis factor alpha (TNF-alpha). The molecule is already in Phase II and in Phase I clinical trials in a range of cancer indications, but the company wants to add several more. "The costs of such trials are significant. On the other hand, we want to start them now. We have the data and to wait longer would make no sense," Bordignon said.

A number of factors also have guided the company's choice of stock exchange. Although the Italian bourse was historically not regarded as being "user-friendly," Bordignon said, a study of the last 27 IPOs indicated that all of them were completed smoothly and within their advertised timelines.

Moreover, the merger last summer between Borsa Italiana and the London Stock Exchange will directly benefit Italy's public health care companies. "The exposure is much broader," he said. Finally, MolMed's shareholder base, which includes investment companies controlled by some of Italy's wealthiest families - Fininvest SpA, the Berlusconi family holding company; Herule Finance SA, the Doris family holding company; and Leonardo Finanziaria Srl, the Del Vecchio family holding company - will have the greatest impact within Italy, he said. "We are an Italian company. We are located in Italy."

MolMed has more than €5 million in funds at present, but has no difficulties raising more cash as it needs it. "Due to the profile of our shareholders, that's never been an issue," Bordignon said.