Seattle Genetics hits milestone
Seattle Times business reporter
Seattle's biotechnology industry has added another member to its $100 million club: Seattle Genetics.
The company has a cash reservoir that deep since it made $62 million through a secondary stock offering added to the $74 million it had in the bank at the end of last year. The amount of cash is a key measurement of biotech companies' viability because they need it to survive the several money-losing years it takes to develop drugs.
Seattle Genetics raised the cash by selling about 8 million shares at $8.25 apiece to mostly East Coast investors and its underwriters — CIBC World Markets, Banc of America Securities and WR Hambrecht.
The company could have been richer if the sale had come at the stock's peak — it traded above $10 within the past month and closed yesterday at $8.89 — but the sale is still the company's most lucrative cash haul ever. Seattle Genetics went public in March 2001 at $7 a share and raised $49 million, a smaller sum than it had hoped for.
The locally based biotechs with at least $100 million are Icos, Corixa, Dendreon, Cell Therapeutics and ZymoGenetics.
Seattle Genetics Chief Executive Clay Siegall said the company will use the money to beef up its pipeline so it can run human tests on five experimental drugs by the end of 2005. It now has two drugs in that stage. The company plans to hire 30 to 35 people in the next 18 months, mainly in clinical development and drug manufacturing.
Siegall said the company plans to expand tests of SGN-15 in lung cancer — preliminary results show it prolongs lives — and to test SGN-30 in patients with certain lymphomas and in a combination with chemotherapy. It plans to push SGN-40 into human tests this year for multiple myeloma and to start human tests next year of SGN-35 for blood cancers and SGN-75 for kidney cancer.
The company, founded in 1997, has not pushed a drug into the final — and most expensive — stage of clinical testing. But its stock has swelled 188 percent in the past year on its prospects, partly because other companies have made hit drugs out of genetically engineered antibodies, the technology Seattle Genetics is using.
Even though the next stages of development will be expensive, the company estimates that it now has enough cash for to keep it running three or four years without any big change in revenue.
"This is an outstanding financing for us," Siegall said. "It puts us in an excellent cash position."
Luke Timmerman: 206-515-5644 or email@example.com
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