Predix IPO price range emerges; Genomic, Avalon, Sunesis a mix; Progenics up; BioDelivery slides

By Ronda Fears

Nashville, Sept. 30 - SkinMedica Inc. did not get its initial public offering off, but on Friday Predix Pharmaceuticals sets initial IPO price talk at $10 to $12 per share.

SkinMedica is getting pushed to the Oct. 3 week, with plans to sell 5.25 million common shares proposed at $11 to $13 each, along with a handful of follow-on deals plus a secondary offering in Endo Pharmaceuticals Inc.

Follow-ons from Panacos Pharmaceuticals Inc. and Threshold Pharmaceuticals Inc. are slated to price during the week, and market sources expect CoTherix Inc. and GTx Inc. will attempt their follow-on deals after getting delayed from this week.

On Friday, BioDelivery Sciences International Inc. revived its follow-on deal, selling a downsized 4.4 million shares, reduced from initial plans to sell 7 million shares, at $2.00 each - discounted from Thursday's close of $2.04. The market was not impressed with the slim discount, however, and the stock Friday lost 24 cents, or 1.76%, to close at $1.80.

The three IPOs for the week, which was one of the busiest in several months, closed out with continuing mixed response. All ended Friday under where they debuted, however.

Avalon Pharmaceuticals Inc. and Genomic Health Inc. both got IPOs off after Wednesday's close, but both were at the low end of guidance ranges and both sank in the immediate aftermarket. Sunesis Pharmaceuticals Inc., which priced its IPO on Monday well below range, also had slipped several notches until late in the week.

Avalon shares Friday ended off 19 cents, or 2%, at $9.30. Genomic lost 20 cents, or 1.7%, at $11.55. Sunesis gained 39 cents, or 6.19%, at $6.69.

In the PIPEs arena Palatin Technologies Inc. announced the sale of $10 million of stock, or 4.5 million shares at $2.22 each, to King Pharmaceuticals Inc., plus three-year warrants for 719,894 shares, exercisable also at $2.22. Cranbury, N.J.-based Palatin, focused on diagnostic imaging, has a collaboration agreement with King, a prescription pharmaceuticals and marketer of drug injection systems.

Venture capital activity also remained somewhat stilled, but on Friday, Pervasis Therapeutics Inc. announced a $12 million series B financing led by new investor Highland Capital Partners with founding investors Polaris Venture Partners and Flagship Venture Partners also participating.

Endo bounces ahead of sale

Endo Pharmaceuticals Holdings Inc. rebounded considerably by week's end from selling pressure since a secondary stock offering by its biggest institutional backers and insiders emerged early in the week.

That had been compounded by news that its generic pain patch in development with partner Noven Pharmaceuticals Inc. was rejected by the FDA.

But by Friday traders said Endo shares had largely recovered from the plunge when the secondary sale was announced. One sellsider said the secondary sales are still an "overhang" but the FDA news was shrugged off after the company pointed out that its financial guidance for 2005 did not include any sales or earnings for the transdermal fentanyl patch.

Endo shares closed out the week gaining 29 cents on Friday, or 1.1%, to $26.67.

SkyePharma spikes

SkyePharma plc, another of Endo's partners in a pain treatment, was sharply higher Friday as analysts appeared optimistic about its chances for a marketing deal for its new asthma drug even though the London-based company is moving to fund late-stage trials itself.

It "remains a story with value to unlock - but it just got more complicated," said Jefferies & Co. analyst Robin Campbell in a report Friday. "Final value for [asthma drug] Flutiform still depends on striking a marketing deal. Although timelines are aggressive, the phase III program is an achievable one, and should open up a viable route to market."

SkyePharma announced midweek plans for a 1-for-5 rights offering of 125.6 million new ordinary shares at 30p to qualifying shareholders for some £35 million to fund the phase III trials for Flutiform instead of waiting to get an out-licensing partner.

In London, SkyePharma shares gained 1.75p on the day, or 4.46%, to settle at 41. In the United States, the stock gained 43 cents, or 6.28%, to $7.28.

Flutiform is a fixed-dose combination of formoterol and the inhaled steroid fluticasone. It has completed a phase II trial review by the FDA, and SkyePharma has submitted an application to begin phase III trials in early 2006 with a target filing date of mid-2007.

Progenics, Cytogen gain

A joint venture between Progenics Pharmaceuticals Inc. and Cytogen Corp., PSMA Development Co., announced Friday positive signs for a an experimental prostate cancer drug in animal testing, and both stocks soared on the news. Progenics also was a gainer on prospective partner chatter, as well, traders said.

Progenics shares added 38 cents on the day, or 1.63%, to $23.71.

Cytogen shares rose 13 cents, or 3.32%, to $4.04.

Beyond the early stage prostate cancer drug news, however, market sources said players also were contemplating that Progenics may be in a position to get a major partnership deal arranged by year-end for its drug methylnaltrexone to treat opioid-induced constipation in patients with advanced medical illness.

Progenics also announced Friday that it has completed enrollment in a phase III study for methylnaltrexone, a month earlier than anticipated. The company said final data is expected in first-quarter 2006.

On the Progenics news, analysts and traders said many players are now seeing a partnership deal for methylnaltrexone with a pharmaceutical company possible by year-end and a New Drug Application in second-quarter 2006.

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