By Brady Huggett
Scios Inc., looking ahead at a launch for lead product Natrecor, put 6.4 million shares on the shelf, filing to raise up to $120 million.
The company's Form S-3 quotes Scios' last reported stock price, on Jan. 17, as $18.625, meaning the company would sell about 6.4 million shares if it raised $120 million at that price. Scios' stock (NASDAQ:SCIO) dropped 93.75 cents Friday to close at $18.937. Scios had about 38.5 million shares outstanding before the filing.
Scios said it would use the proceeds to fund its new product development and commercialization activities, including the launch of its flagship product, and other general corporate purposes.
"We are going to fund our pipeline and fund the launch of Natrecor," said Wendy Carhart, associate director of investment relations and corporate communications at Scios. "The proceeds will be used to get that up and out with our sales force."
Scios, of Sunnyvale, Calif., focuses on heart failure and inflammatory diseases. It has a list of products in various stages of development for indications, including Type II diabetes, coronary artery disease, rheumatoid arthritis and Alzheimer's. It licensed its recombinant form of basic fibroblast growth factor, called Fiblast, to Chiron Corp., of Emeryville, Calif., in a $24.5 million agreement. (See BioWorld Today, Nov. 3, 1999.)
But it is Natrecor that has provided the most trouble and promise.
Natrecor, which was first cloned by Scios in 1989, is a genetically engineered version of human b-type natriuretic peptide (BNP) - a 32-amino-acid, naturally occurring peptide produced predominantly in the ventricles of the heart.
In April 1999, after Natreco had gone through an FDA advisory panel with a 5-to-3 approval recommendation, the FDA itself said it would not approve the intravenous therapy for acute congestive heart failure. The news weakened Scios' stock by 61 percent but company officials vowed to continue to work with the drug. (See BioWorld Today, April 29, 1999.)
Scios stuck with it and filed an amended new drug application with the FDA this month. Anticipating approval, it then nabbed Quintiles Transnational Corp., of Research Triangle Park, N.C., to handle Natrecor's commercialization using a 180-person sales force. (See BioWorld Today, Jan. 12, 2001.)
With the amendment filed, Scios waits during the shortened response window.
"We are looking for approval in the mid-year timeframe," Carhart said. "Since this is an amended NDA, the FDA has a six-month review process."
The original FDA denial came just after a time when Scios, anticipating the initial launch of Natrecor and aiming for profitability in 2000, cut its number of employees and consolidated its facilities into its current location in Sunnyvale. Following the nonapproval, profitability was reforecasted for 2001. With a decision expected in mid-summer, Carhart said the current expectation is "2003 for break-even."
"The shelf registration is good for two years," Carhart added. "So it gives us flexibility as to when we raise the funds."