Cytokinetics Inc. priced its initial public offering Thursday, raising $89.7 million, slightly more than it expected to raise when it filed in January.
The company sold 6.9 million shares of its common stock at $13 a share. It expected to price the shares at $12 apiece. The company filed three months ago to raise $86.25 million. (See BioWorld Today, Jan. 29, 2004.)
The underwriters have an overallotment option for about 1 million shares. Goldman, Sachs & Co., of New York, is acting as lead underwriter, with New York-based Credit Suisse First Boston, San Francisco-based Pacific Growth Equities LLC and New York-based Lazard Freres & Co. acting as co-managers.
Cytokinetics listed its common stock on the Nasdaq National Market under the symbol "CYTK." Wall Street welcomed the South San Francisco-based company as the stock shot up 23.9 percent, or $3.10, on Thursday, to close at $16.10.
Company officials are in an SEC-imposed quiet period, but the company's prospectus said the IPO was being done concurrently with a private placement of shares to an affiliate of London-based GlaxoSmithKline plc.
The prospectus also said the company would use proceeds to fund late-stage development activities for its two cancer products, if it decides to exercise an option under its strategic alliance with GSK. Other funds would go toward preclinical activities and the clinical development of CK-1213296, expected to enter the clinic this year as a treatment for acute congestive heart failure.
The rest of the funds would cover other research expenses and be used to scale-up the company's development, sales, marketing and manufacturing operations. It also might use $5 million to in-license or develop technology, and to acquire or invest in complementary businesses, products or technologies.
Cytokinetics said the IPO funding is sufficient for 24 months of operating requirements.
Founded in 1998, the company focuses on the discovery, development and commercialization of small-molecule drugs that target the cytoskeleton. It develops drugs to treat cancer, cardiovascular diseases, fungal diseases and other diseases. It believes its products are potentially safer and more effective than other therapeutics.
In June 2001, the company entered a strategic alliance with GSK to discover, develop and commercialize small-molecule therapeutics targeting human mitotic kinesins to treat cancer and other diseases. GSK is conducting Phase II trials of SB-715992, and GSK expects to begin Phase I trials this year for SB-743921, both in cancer indications. SB-715992, Cytokinetics' lead drug, entered a Phase II trial in late 2003 to treat non-small-cell lung cancer and is expected to enter multiple Phase II trials in other solid and hematologic cancers throughout this year.
The company also intends to file an investigational new drug application in the second half of this year to advance its preclinical candidate for acute congestive heart failure. The drug targets cardiac myosin, a cytoskeletal protein essential for cardiac muscle contraction.