Cancer drugmaker Endocyte raises $75 million in IPO

Endocyte Inc., a developer of drugs for ovarian and lung tumors, raised $75 million in its initial public offering after cutting the price twice this week for a total reduction of as much as 60 percent.

The West Lafayette-based company sold 12.5 million shares at $6 today, according to a filing with the Securities and Exchange Commission and data compiled by Bloomberg. Previously, the company had proposed offering 5.35 million shares at $13 to $15 apiece, and then cut the price a second time to 10.7 million shares at $7.

Only half of the 12 IPOs originally scheduled for what would have been the busiest week since 2007 were completed, according to data compiled by Bloomberg. While NeoPhotonics Corp. and Epocrates Inc. rallied more than 20 percent after their offerings, companies from Imperial Holdings LLC to BioHorizons Inc. postponed their sales, the data show. The Egyptian crisis may be causing investors to reconsider some offerings, Federated Investors Inc. said.

“Investors are separating the wheat from the chaff and are continuing to remain engaged with the attractive deals in the sectors that they like,” said Philip Orlando, chief equity market strategist at Pittsburgh-based Federated, which manages about $350 billion. “For the ones that they’re nervous about, they’re allowing their concerns about geopolitical risk, particularly Egypt, to cool their ardor.”

Endocyte is in the second of three stages of tests generally needed for U.S. approval for its most advanced drug, called EC145, for ovarian and lung tumors. The drug attaches the vitamin folate to a common chemotherapy to target tumors while avoiding healthy cells.

The company said it plans to use the proceeds from its IPO to fund more tests for EC145 and to advance development of other treatments. Endocyte also is working on drugs for prostate cancer and inflammatory disorders.

Endocyte would employ a 50- to 75-person sales force for EC145 after the drug’s clearance by the U.S. Food and Drug Administration, according to the initial offering plan. The company may seek partners to promote the drug outside the U.S.

The drugmaker said it is developing a lab test to identify patients whose tumors have excessive amounts of folate, making them most likely to benefit from the drug. The vitamin aids cell division, and some tumors overproduce folate as they grow.

The Endocyte offering was arranged by Toronto-based Royal Bank of Canada and Boston-based Leerink Swann & Co. Endocyte advanced 13 percent, to $6.75, at 1:45 p.m. in its first day of trading on the Nasdaq Stock Market, after rising as much as 14 percent.

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