Keyrx Sees IPO at $200m. Valuation

Byline: DAN GERSTENFELD
Date: Wednesday, January 26, 2000
Publication: Jerusalem Post, Daily Page: 12
Section: Economics

Jerusalem-based Keryx Biopharmaceuticals intends to go public on Nasdaq later this year based on a company value of over $200 million, CEO Morris Laster said yesterday.

Laster said the drug-development company yesterday completed a $8.8m. private placement based on pre-money company value of $20m.

Investors in the placement, which was comprised of convertible preferred stock, included private and institutional investors whose names were not disclosed. Laster said that Keryx does not intend to raise additional capital before it goes public.

The offering was led by Paramount Capital Inc., which holds a 30 percent stake in the company, and Leumi & Co. Underwriters.

According to Laster, the company will start talking to underwriters in the US and Europe in coming weeks concerning the planned initial public offering.

The company, which is incorporated in Delaware, said it intends to use the proceeds from the private placement to continue the clinical development of its compounds, which have a potential market of $7 billion. In addition, it intends to open new laboratories in Jerusalem.

Keryx, which started as venture capital firm specializing in pharmaceutical compounds, is now an operating company developing several products.

They include KRK-123, a treatment of hormone refractory prostate cancer, for which currently there is no effective treatment. The company intends to file request to the US Food and Drug Administration in the second quarter to conduct phase 1 and 2 clinical trials of the treatment.

In addition, it has already begun clinical trails for KRK-123, for which it believes the market potential amounts to some $2.5b., in Italy.

Another promising compound is KinAce, which harnesses the power of genomics for rapid drug discovery. Laster said the company hopes to receive its first FDA approval in 2002, start selling the product in 2003, and see profits in 2004.

In addition, Keryx has a licensing agreement with Italian pharmaceutical company Alfa Wassermann to develop and market Sulodexide, a late stage drug for the treatment of kidney disease, diabetic tetinopathy, thrombosis, and other diseases.