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Cancer Drug Spinoff of Australian Company, Audeo Oncology Inc. Preps $49 Million IPO


12/10/2012 8:47:03 AM

An Australian import to San Francisco plans to raise $49 million in an initial public offering to fuel late-stage development of its experimental cancer-targeting drug. Audeo Oncology Inc., incorporated in June as part of a reorganization of the publicly traded Australian company Alchemia Ltd., priced its IPO of 3.25 million shares at $14-16 per share. It will trade starting next week on the NASDAQ global exchange as "AURX." It is one of two IPOs planned by Bay Area companies next week. The other is San Mateo-based SolarCity Corp.'s $141 million offering; it will be traded on NASDAQ as "SCTY." Soon after Audeo's IPO, the company will demerge from Alchemia, with that company's shareholders receiving one common share of Audeo for every 37 ordinary shares of Alchemia. The move should benefit current Alchemia backers like Allan W.B. Gray and his Orbis Investment Management Ltd., according to the Sydney Morning Herald. Gray invested $21 million in Alchemia last year, according to the newspaper, and would control about 13 percent of Audeo after the demerger, according to a Securities and Exchange Commission filing. Audeo lost $10 million in the fiscal year ended June 30 and had an accumulated deficit of about $47.1 million as of Sept. 30. Audeo's Phase III drug combines the chemotherapy agent ireinotecan with what it calls "hyaluronic acid chemotransport technology," or HYACT, to target metastatic colorectal cancer. The technology helps existing chemotherapy agents zero in on tumor cells, the company said in an SEC filing, lowering chemo's toxic side effects.


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