PacMab to raise $5m in IPO

Sydney-based cancer drug development company PacMab has lodged a prospectus for an IPO to raise AUD$5 million to commercialise its treatment for a fatal blood cancer and potentially other blood disorders, with listing of its shares on the ASX expected in mid December this year.

PacMab specialises in the development and commercialisation of monoclonal antibody treatments. The funds will enable the company to complete a combined phase I/IIa clinical trial for its lead drug therapy, a monoclonal antibody known as cKap, to specifically treat the most prevalent form of multiple myeloma cancer, which affects 70 per cent of multiple myeloma patients.

The offer is due to open on November 3 and close on December 8 with a minimum 12.5 million shares being offered at an issue price of $0.40 each. PacMab is expected to list on December 16 and based on the offer price, the company's market capitalisation on listing will be $19 million.

PacMab's CEO, Alan Liddle, said in a statement the company was confident the IPO would be successful, especially given the "superior" nature of the company's therapeutic pipeline, the current unmet clinical need and market demand and the recent positive re-rating by the market of the Australian biotechnology sector.

Liddle said cKap was a selective therapeutic approach aimed specifically at treating tumours with a particular genetic characteristic, and estimated the potential world market for effective antibody therapies for multiple myeloma at more than $US1.4 billion per annum.

Multiple myeloma is a blood cancer that affects more than 100,000 patients in developed countries, and this number is expected to increase due to the earlier onset of the disease and the ageing of the population. It is currently incurable, despite the use of chemotherapy, radiotherapy and other treatments, all of which have debilitating side effects and are reported to cost to up to US$50,000 per patient each year.

"PacMab has a pipeline of further prospective drugs using the monoclonal antibody technology to target other blood disorders, with our strategy to take the drugs through clinical trials and to incrementally licence them to major pharmaceutical and biotechnology companies across the world", said Liddle.

"We are aiming to transform the status of the blood cancer from a terminal disease to a chronic managed illness, leading to a substantial increase in the number of patients living with multiple myeloma and a consequent increase in the market size for a successful PacMab therapy. "CKap, which is at the late preclinical phase of development, has been designed to specifically target and kill multiple myeloma cells. In vitro and in vivo tests show that cKap doesn't target healthy cells and it's therefore expected that cKap therapy should have few side-effects, vastly extending and improving the quality of life of multiple myeloma patients. We plan to enter the clinic with phase I/IIa clincial trials of 20 patients at major Australian hospital in 2006, before licencing the drug to a major pharmaceutical company to take the drugs to market in 2008." he added.

PacMab's drug technology has been developed by a team led by PacMab executive director and chief scientific officer, Prof Robert Raison, who is professor of immunology at the University of Technology, Sydney. The technology was spun out of UTS in 2001 to develop its commercial applications and accroding to Liddle PacMab is the first IPO for for the university.

"They were very pragmatic -- it only took six months for the spin-out to be finalised," he said. Major shareholders of the company include 23 per cent shareholder, specialist life sciences fund Symbion, which is 40 per cent owned by ABN AMRO Australia. UTS holds a 5 per cent stake and ABN AMRO directly holds another 5 per cent stake.

The board is chaired by Dr Eric Tan, a former director of CSIRO and SBS and a director of Symbion. Liddle was CEO of Micromedical Industries (now Ventracor) for 12 years. The offer is sponsored by the lead manager Axis Financial Group (Australia) Limited.