BioWorld International Correspondent

PARIS - Immuno-Designed Molecules SA proposed an IPO on the Nouveau Marche of the Euronext stock exchange in Paris last week, offering 8.1 million shares at €10.50 to €12.20 per share.

The offering may be extended by 1.215 million shares if demand is strong. In addition, Paris-based UBS Ltd., the global coordinator and bookrunner of the offering, is being granted an overallotment option on about 1.4 million existing shares by certain shareholders.

UBS is managing the offering in conjunction with Oddo et Cie, of Paris, as senior co-lead manager, and Fortis Bank, of Brussels, Belgium, as co-lead manager.

If the maximum possible number of new shares were issued, they would represent some 40.6 percent of the company's post-IPO capital. Based on the midpoint of the offer price range, the IPO would generate net proceeds of €92 million. A spokesperson for the company told BioWorld International that, taking account of outstanding warrants, the offering would value the company at some €200 million to €230 million pre-IPO, implying a capitalization of €280 million to €320 million post-IPO. IDM had cash reserves of €33.3 million on Dec. 31.

The IPO will consist of a retail offering in France and an international institutional offering. The retail component could represent at least 10 percent of the shares, depending on demand, and is scheduled to close June 15. The institutional placement, which will include the United States under Rule 144A of the 1933 Securities Act, should close June 16. The definitive offer price will be announced that day and trading is expected to start on the Nouveau Marche June 17.

Since its creation in 1993, IDM has raised €86 million, of which €66 million was raised in successive financing rounds through November 2000 and €20 million was injected by the French pharmaceutical company Sanofi-Synthélabo SA in October 2002. Sanofi had undertaken to make an equity investment of €30 million in IDM under the terms of a co-development agreement the companies signed in January 2002, which covered the whole of IDM's portfolio of cell drugs for cancer. To fulfill that commitment, Sanofi will purchase an additional €10 million of IDM stock at the public offer price.

Sanofi is the second largest shareholder in IDM, with an 11 percent stake, while the largest is another of IDM's industrial partners, Medarex Inc., of Princeton, N.J. (26 percent). IDM signed a license agreement with Medarex in July 2000 for it to manufacture and utilize certain antibodies.

IDM is developing cell therapies for various cancers, and is specialized in products that combine dendritophages (monocyte-derived dendritic cells taken from the patient) with specific antigens. It has six products in clinical development, three of which are designed to destroy residual tumor cells and three to prevent tumor relapse.

The company's lead product is Mepact, a cell therapy for osteosarcoma, a bone cancer mainly affecting adolescents. It was one of the assets IDM acquired from Wisconsin-based Jenner Biotherapies in April 2003, and the product has since completed Phase III trials. Mepact has been granted orphan drug status in the U.S., and IDM has applied for orphan status in Europe as well. IDM expects to have the product on the market in 2006.

The company has five other products in clinical development, the most advanced of which are Bexidem, a treatment for bladder cancer that is in Phase II/III trials, and Uvidem (melanoma), which is being co-developed with Sanofi and is in Phase II trials. In addition, Eladem (prostate cancer) and IDM-4 (chronic lymphocyte leukemia) have completed Phase I/II trials, while Collidem (colorectal cancer) is undergoing a Phase I/II trial in the U.S.

IDM also has five products in preclinical development, including Osidem, which in its original form was taken successfully through Phase III trials in Europe. But when IDM submitted an IND application in the U.S., the FDA required the product be frozen before being reinjected into the patient. As a result, IDM decided to start from scratch, although the company says the redevelopment of the product is moving ahead rapidly. The cGMP production facility IDM recently inaugurated at its U.S. research facility in Irvine, Calif., is designed to support the development of Osidem, as well as that of Collidem.

Since IDM will not have a product on the market until 2006 at the earliest, it expects to continue making losses for another two years, at least. Its largest source of income in 2003 was the €5.3 million of funding it received from Sanofi.

Altogether, the 10-year deal with Sanofi could be worth as much as €616 million for IDM. Sanofi has first right of refusal on up to 20 cell drugs from IDM's product portfolio and can select a maximum of 10 new IDM products during the first five years, and then two more each year for a further five years. It would pay IDM milestones of between €17 million and €32 million on each product it develops. Sanofi will finance the clinical development of the products, up to and including regulatory filings, and will have exclusive worldwide rights to commercialize the cell drugs for which it obtains regulatory approval.