PARIS (Reuters) - French biotech group Neovacs will seek to raise at least 20 million euros ($27.3 million) from an initial public offering (IPO) this month to fund its key immunotherapy research, the company said on Friday.
Founded in 1993 as a spin-off from Pierre Marie University in Paris, Neovacs develops immunotherapy technology.
"We are now starting clinical phases on two products. Very soon we will have three or four clinical studies under way. This requires strong financial means," Chief Executive Guy-Charles Fanneau de La Horie told Reuters.
The funds raised should give Neovacs at least two years of "visibility." The company is already in contact with international drugs groups interested in its research, he added.
The success of several rights issues last year -- including those of NicOx (NCOX.PA), Cellectis (ALCLS.PA), Innate Pharma (IPH.PA) or Exhonhit (ALEHT.PA) -- convinced Neovacs that "markets were receptive to biotechnology firms."
Neovacs will offer 3.9 million new shares from a capital increase or 27.46 percent of its capital. The indicative range for the offering is 5.2-6.0 euros.
The exercise of a greenshoe option could raise the size of the issue to 26.4 million euros, handing 36.3 percent of the group"s capital to the public.
Subscription runs from March 19 until March 30. Trading starts on March 31.
Truffle Capital, Novartis Venture fund (NOVN.VX), and OTC Asset Management currently own a combined 73 percent of the capital. Novartis Venture fund alone has 20 percent.
Kinoids are vaccines that help an organism create the antibodies it will use to fight diseases.
The company"s lead immunotherapy program TNF-alpha Kinoid targets TNF (Tumor Necrosis factor) in autoimmune diseases. It is undergoing Phase I/II clinical trials in Crohn disease patients and will be moving to the more advanced Phase II in mid-2010.
The company has also started a Phase II trial in rheumatoid arthritis patients.
The second key product candidate is IFN-alpha Kinoid, an immunotherapy that targets interferon alpha in patients suffering from the chronic inflammatory disease Lupus. That product will enter Phase I/II soon.
"We think that in mid-2011 we will have a series of very interesting data from these clinical studies that will give us the strategic options of either sealing partnership deals with pharmaceuticals groups or continuing to develop as a standalone," said Fanneau de La Horie.
These two products could be on the market in 2014.
International pharma groups such as Merck (MRK.N), Johnson Johnson (JNJ.N), Pfizer (PFE.N) or Abbott (ABT.N) are already on the TNF-alpha market. Gementech DNA.N, AstraZeneca (AZN.L) or Novo Nordisk (NOVOb.CO) are on the interferon alpha market.
($1=.7321 Euro) (Reporting by Noelle Mennella; Writing by Dominique Vidalon, editing by Antonia van de Velde)
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