Free of Zoetis, Sweden's Oasmia hits the road to pitch IPO

Oasmia Pharmaceutical, a Swedish company developing cancer drugs for pets and people, is launching an investor roadshow in preparation for an initial public offering, which the company said Aug. 17 it expects to close by the end of the month. Oasmia's appeal to investors comes just weeks after it severed its ties with Zoetis ($ZTS), which previously held distribution rights to Oasmia's Paccal Vet-CA1 and Doxophos Vet, the latter of which is still in development.

The roadshow and subsequent IPO come just weeks after Oasmia announced that it was breaking free of Zoetis, which has been shrinking its product portfolio, closing some manufacturing plants and planning layoffs in a bid to boost its profits. Zoetis has been under extreme pressure from activist hedge fund investor William Ackman of Pershing Square Capital, who has reportedly pushed the company to improve its cost structure or put itself up for sale.

Oasmia had originally filed to raise $23 million in its IPO, but the revised F-1 doesn't specify either the amount of shares to be offered or the offering price. The company said in a press release that those figures are yet to be determined.

The company's lead program is centered around its formulation of the commonly used chemo drug paclitaxel. Oasmia has used proprietary technology to increase the drug's solubility without the use of toxic solvents, which it believes will facilitate the use of higher and potentially more effective doses, according to the F-1. Paccal Vet-CA1 has a conditional approval from the USDA for the treatment of mammary cancer and squamous cell carcinoma in dogs, which allows the company to market the drug on a limited basis. Oasmia plans to use part of the proceeds from the IPO for the Phase III studies necessary to gain full marketing clearance.

Doxophos Vet is a special formulation of the chemo drug doxorubicin, which Oasmia is developing to treat lymphoma in dogs. Oasmia also plans to devote some of its IPO proceeds to further researching that drug, though it admits in the F-1 that it is facing stiff competition from several animal health companies, including Aratana Therapeutics ($PETX), which has two canine lymphoma drugs already on the market.

Potential investors will no-doubt have questions for Oasmia about its competitive profile, not to mention the losses it has racked up while developing its veterinary portfolio. Oasmia's sales skyrocketed from $7,000 in the fiscal year ended April 2014 to $236,000 in fiscal 2015, though the company's net loss expanded a bit, from $23 million to $13.4 million, according to its most recent F-1 filing to the SEC. The company has just $8.8 million in liquid assets.

- here's the press release
- access Oasmia's revised F-1 form here