Clovis? IPO plan creates biotech buzz

Clovis Oncology Inc.’s Patrick Mahaffy is the man to watch in the coming months.

He has created a buzz second to none in the biotech world about whether his new cancer drug company Clovis Oncology in Boulder really will be able to raise $149.5 million in an initial public offering as suggested in the company’s recent registration filing with the U.S. Securities and Exchange Commission.

No date has been announced yet for the IPO.

It’s a huge no-no with SEC folks for a company to talk about a pending IPO, so Mahaffy and others at Clovis aren’t offering public comments. On the filing documents, there are blank spaces where the stock price numbers should be.

But at least one analyst said the IPO price is “do-able,” at a stock price of $12 to $15 per share, which would give the company a market capitalization of $600 million.

But another industry insider suggested that Clovis may be betting too big in an uncertain economy and would not be able to raise even the base level amount it needs.

Venture capital guru Kyle Lefkoff in Boulder had big congratulations for Mahaffy when the SEC filing was announced, as did Holli Riebel at the Colorado Bioscience Association.

Clovis posted a $38.6 million loss from operations in 2010 and spent $22 million on research and development, according to the filing documents. The company used another $12 million to get the rights to the drugs it is developing.

The company plans to use some of the IPO proceeds to pay for clinical trials testing the effectiveness and safety of its three experimental drugs, according to the SEC filing.

At the same time, Clavis Pharma ASA in Norway is expanding its ongoing observational study of a Clovis pancreatic cancer drug. Clovis has bought the rights to two other cancer drugs as well.

Lung cancer test

Over at SomaLogic Inc. at 2945 Wilderness Place in Boulder, a key lung cancer test-product could be on the market by the end of the year, according to Mark Messenbaugh, director of corporate strategy at the company.

Madison, New Jersey,-based Quest Diagnostics Inc. has the rights to the product, so the exact timing is up to them, Messenbaugh said. Quest Diagnostics (NYSE: DGX) made a $15 million equity investment in SomaLogic in 2005 in the agreement to develop the molecular test.

SomaLogic also has a chronic kidney disease test in the research stages. The company was founded by Larry Gold, a well-known serial entrepreneur in Boulder who also has been a professor at the University of Colorado at Boulder since 1970.

Gold is probably better known, however, for founding NeXagen Inc. in Boulder, which later became NeXstar Pharmaceuticals Inc. In 1999, NeXstar merged with Gilead Sciences Inc. to form a company that would develop products to treat infectious diseases.

Distillation methods

At the same time, Ariel Pharmaceuticals founder Steve Orndorff has big plans to get into a completely different distillation business in the future — once he wraps up what he estimates will be about five years of work on the current licensing rights he has to commercialize three experimental neurological drugs.

Orndorff and his wife could invest in the boutique gin distillery business some day soon, he said at a recent bioscience networking event, not entirely tongue-in-cheek. After all, the couple has plenty of experience in distillation research from a variety of bioscience jobs they have held throughout their careers, Orndorff said.

Orndorff started Ariel in Broomfield recently after leaving Broomfield-based Accera Inc., an Alzheimer’s therapy company that he founded and ran. He runs Ariel Pharmaceuticals out of his house — working with industry experts around the country and around the globe on testing, approvals, raising money and other logistics unique to the bioscience world.

Each drug has specific FDA guidelines for being approved for commercial sale, Orndorff has said. He plans to outsource the manufacturing of batches of drugs that he’ll need for clinical trials as well.

Orndorff also is the head of the board of directors of the Colorado BioScience Association, an industry trade group with several Boulder Valley members. He’s a founding board member of that group and the past president of the Society for Industrial Microbiology.

Beth Potter can be reached at 303-630-1944 or email bpotter@bcbr.com.

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