While Dendreon ($DNDN) fell well short of serving as a good example of how cancer vaccine businesses can succeed on the public markets, it did at least provide a horrible warning of what can go wrong. Argos Therapeutics is undeterred and has revived its IPO plans.
The North Carolina-based biotech first tried to go public in August 2011 but withdrew its filing 7 months later. Since then it has raised cash from international investors in a bid to push its metastatic renal cell carcinoma immunotherapy towards commercialization. Selling the Korean and Russian rights helped raise $42.5 million in August and investors chipped in a further $17.5 million in November. Phase III trials are costly though and Argos plans to use some of its $60 million IPO to finish the study.
Cash is also earmarked for a Phase II trial of the immunotherapy in another indication and for two mid-stage studies of a therapeutic HIV vaccine candidate. If successful, Argos will advance its plans to lease, build out and equip a commercial production plant. In personalized immunotherapies--which take cells from a patient and turn them into a treatment--manufacturing is a big headache. Argos has learned from the travails of Dendreon--which has struggled to control costs--and is planning an automated process.
Up-front investment is needed to achieve these ongoing savings. Argos warns it will need to obtain "significant financing" on top of the IPO cash to complete its production plant and commercialization plans. All of this money will be needed before the immunotherapy begins generating revenues. And with overall survival data from the Phase III trial not due until 2016, Argos is still years away from providing a return for investors.
These risks and timelines are common to development stage biotechs, but the experience of Dendreon has dampened investor appetites for cancer immunotherapies. Speaking to FierceBiotech in August, Argos CEO Jeff Abbey said "there remains, if not a bias, a skepticism against personalized cell therapy for cancer because of Dendreon."
- here's the S-1
- read FierceBiotech's take