Sucampo Pharmaceuticals Inc. priced its initial public offering of 3.8 million shares at $11.50 each for gross proceeds of $43.1 million, half of what the company had hoped for when it first filed to go public more than a year ago.
Actual proceeds to the company will be even less, since a portion of the offering - 625,000 shares - are being offered by a selling stockholder. Overallotments of 562,500 shares also will be offered by stockholders, rather than the company.
Upon the IPO's close, Sucampo expects net proceeds of $28.4 million, a far cry from the $86 million it hoped to raise, according to its June 2006 filing. The Bethesda, Md.-based company later lowered its expectations, setting a $14 to $16 price range last month that would have raised about $57 million at the midpoint. (See BioWorld Today, June 21, 2006.)
Its stock (NASDAQ:SCMP) made its debut Thursday afternoon, gaining 76 cents to close at $12.26. After trading as high as $13.50 Friday, Sucampo's shares closed at $11.99, down 27 cents.
The firm, which develops and markets drugs based on prostones across a range of indications, expects the proceeds to fund commercial efforts for its marketed product Amitiza and to advance its clinical pipeline. About $10 million has been earmarked for the expansion of commercialization activities in the U.S. and non-U.S. markets for Amitiza (lubiprostone), which gained FDA approval in January 2006 for chronic idiopathic constipation. In its filing, Sucampo said it expects product royalty revenues of about $9.6 million for the quarter ending June 30.
Amitiza is partnered with Osaka, Japan-based Takeda Pharmaceutical Co. Ltd., which handles broad-based marketing to primary care physicians with complementary efforts by Sucampo's specialty sales force. Sucampo retains sole rights to the drug outside North America, and expects to use a small portion of the IPO proceeds for regulatory efforts in Europe and Japan.
The company allotted about $1 million for two post-marketing studies of Amitiza to test its safety in patients with renal or hepatic impairments. Sucampo also is testing the drug in other constipation-related gastrointestinal indications, and recently submitted a supplemental new drug application in irritable bowel syndrome with constipation. The firm plans to start a Phase III trial later this quarter in opioid-induced bowel dysfunction.
Most of the remaining IPO proceeds will be invested in other pipeline products. Sucampo expects to start a Phase II trial later this quarter with SPI-8811 (cobiprostone) in non-steroidal anti-inflammatory drug-induced ulcers, with additional Phase II studies coming later this year and in 2008 in portal hypertension and in disorders associated with cystic fibrosis. SPI-8811 is in preclinical development in nonalcoholic fatty liver disease in chronic obstructive pulmonary disease.
Earlier in development, the company has SPI-017, aimed at treating peripheral arterial and vascular disease and central nervous system disorders. That program is expected to enter Phase I next year with an intravenous formulation in peripheral arterial disease and an oral formulation in Alzheimer's disease.
Sucampo reported net income of $516,000, or 1 cent per share for the first quarter of 2007. As of March 31, the company had cash totaling $15.7 million.
In other financings news:
• Novacta Biosystems Ltd., of Welwyn Garden City, UK, completed a €600,000 (US$827,128) investment round from new investors, including Esperante, and existing shareholders Westgate Hall, GEIF Ventures and Oxford Technology 4 VCT. Novacta is developing naturally derived products as anti-infective agents for hospital-based infections, and the funding primarily will be put toward its lead program, which is in preclinical development against Clostridium difficile. The company's additional programs include agents targeting methicillin-resistant Staphylococcus aureus infections, along with other antiviral and oncology indications.
• KineMed Inc., of Emeryville, Calif., completed a $15 million convertible note offering led by a direct investment from Stanford Financial Group and joined by existing investors from previous financing rounds. Funds will be used to advance into the clinic with the company's lead compound, KM-801, a small molecule that showed in preclinical studies an ability to alter microtubule dynamics in nerve cells. KM-801 is expected to start Phase I testing next year in amyotrophic lateral sclerosis. Remaining proceeds will support further acquisition of compounds in KineMed's core areas of atherosclerosis and reverse cholesterol transport, diseases of fibrosis and inflammation and lipid disorders including metabolic syndrome. Ledgemont Capital served as placement agent.