BioWorld International Correspondent

Santhera Pharmaceuticals AG began a roadshow Monday in support of a planned initial public offering on the Swiss Stock Exchange in Zurich, through which it intends to raise up to CHF98.4 million (US$77.7 million). Shares are due to begin trading Nov. 3.

The Liestal, Switzerland-based company is offering up to 983,859 new shares, and has set an indicative price range of CHF85 to CHF100 per share. An additional 147,579 shares would be available to cover overallotments.

Following the IPO, the company would have 2,951,577 shares outstanding, or 3,099,156 shares if the greenshoe option were exercised in full. The post-IPO free float would be 33.3 percent to 36.5 percent.

The funding would be used to progress the company's existing clinical development projects, to take new projects into the clinic, to build a U.S. sales and marketing capability and to fund potential acquisitions.

Santhera, which was formed via a stock-based merger in September 2004 between Heidelberg, Germany-based Graffinity Pharmaceuticals AG and Liestal-based MyoContract AG, has four clinical development programs under way.

Three programs involve its lead drug candidate, SNT-MC17 (idebenone), a synthetic analogue of co-enzyme Q10. That compound is undergoing pivotal Phase III trials in Europe and the U.S. in Friedreich's ataxia (FRDA), an inherited neuromuscular degenerative condition caused by a disruption in the gene encoding the mitochondrial protein frataxin. That condition leads to the development of speech problems, gait disturbance, muscle wasting and heart disease, the most common cause of death.

Takeda Pharmaceutical Co. Ltd., of Osaka, Japan, holds European rights to the product, while Santhera holds rights in the U.S., where it intends to commercialize the product itself. (See BioWorld International, Aug. 10, 2005.)

Idebenone also is in Phase II studies for treatment of the neuromuscular degenerative condition Duchenne muscular dystrophy and Leber's hereditary optic neuropathy, a rare genetic condition that causes degeneration of nerve cells in the retina and optic nerve and rapid deterioration of vision and blindness.

Santhera gained a second clinical-stage drug candidate last month when it in-licensed fipamezole (JP-173), an alpha2-adrenergic receptor undergoing a Phase II trial for treatment of levodopa-induced dyskinesia in Parkinson's disease. The license came from Turku, Finland-based Juvantia Pharma Oy. Santhera also gained an option to acquire the product outright by purchasing all of Juvantia's stock.

"The option has a maturity up to the end of 2008, and we can extend up to mid-2009," Santhera Chief Financial Officer Barbara Heller told BioWorld International. By that time, a Phase IIb trial would be completed. All of Juvantia's value now is vested in the fipamezole program, and Juvantia CEO Juha-Matti Savola has joined Santhera to manage its development. "They have scrapped their preclinical projects. The operations are currently being reduced to zero," Heller said.

Santhera has raised CHF80 million since the beginning of 2004, a figure which includes some cash raised by its two predecessor companies.

Earlier this month, it took in €10 million (US$12.6 million) in a Series C financing round led by existing investor New York-based NGN Capital, and it has an option to call on another €5 million.

"The €5 million is committed money from the investors who did the round, in case the IPO wasn't possible now," Heller said. "It kept us flexible in terms of market environment."