The executives of Sweden-based Oasmia Pharmaceuticals ($OASM) knew they would be facing a tough market when they launched their initial public offering in October. And, in fact, the company raised just $9.5 million--less than half its initial target. But the folks at Oasmia, who are developing cancer drugs for both people and pets, remain optimistic about their mission, as well as their opportunity to help forge a new market for chemotherapy drugs that are designed specifically for dogs, said Julian Aleksov, executive chairman of the company, in an interview with FierceAnimalHealth.
"This is a new and interesting market," Aleksov says of veterinary oncology. "We have learned so much about cancer in pets and we would like to control the market."
Oasmia began its IPO journey in August, shortly after ending its relationship with Zoetis ($ZTS), which held the distribution rights to its two veterinary oncology drugs, Paccal Vet-CA1 and Doxophos Vet. Oasmia is now distributing Paccal Vet-CA1, which has a conditional approval from the FDA for the treatment of mammary cancer and squamous cell carcinoma in dogs. It is developing Doxophos Vet to treat lymphoma in dogs.
Aleksov said he and his colleagues at Oasmia feared that the products wouldn't get the attention they deserved if they remained under Zoetis' control. That's because earlier this year, Zoetis greatly reduced its product portfolio and changed its research strategy in a bid to reduce its cost structure. Although no one at Zoetis said anything about Oasmia's drugs being put on the backburner, Aleksov recalled, "they did say there were overall changes and the products may not be part of the strategy. We agreed that we would be more comfortable pursuing the drugs ourselves."
Oasmia established a veterinary sales operation in the U.S. and was hoping to raise $23 million in its IPO to support the continued development of its products. But despite the fact that the biotech IPO window had been open for some time, investors had grown wary by the time Oasmia went public. The Nasdaq Biotechnology Index has fallen 11% in the last three months, and Aleksov told a Wall Street Journal blogger that he estimated most healthcare funds had lost as much as 35%. Just before the IPO, Oasmia tried to woo more investors by offering one warrant for every two shares that would allow them to buy shares at 125% of the offering price for up to four years.
For now, Oasmia is marketing Paccal Vet-CA1 on a limited basis to veterinary oncologists, Aleksov says. The trials of Doxophos Vet are ongoing and the company is on track for FDA approval late next year, he says.
Although Oasmia is initially focused on selling its veterinary drugs to specialists, Aleksov believes there will be a big opportunity to get general practitioners on board with the products, too. Towards that end, the company is putting together a small team of salespeople and key opinion leaders, and it is preparing seminars for veterinarians, who haven't had much exposure to chemo drugs designed specially for animals. "Education will be very important," he says.
- here's the WSJ blog item