Allozyne Seeks Stock Listing Via Merger With Former NeoRx

Allozyne Seeks Stock Listing Via Merger With Former Neorx [the Seattle Times]

From Seattle Times (WA) (June 23, 2011)

June 22--Allozyne, a Seattle biotechnology company focused on multiple sclerosis and other autoimmune diseases, said Wednesday it plans to combine with the public company that used to be Seattle-based NeoRx in a deal whose complexity rivals both firms' research programs.

If successful, the result would be that shareholders of privately held Allozyne -- largely venture-capital firms -- will own about two-thirds of the combined company, whose shares will be listed on Nasdaq. The combined company will then take Allozyne's name and be headquartered in Seattle.

For Poniard Pharmaceuticals, known as NeoRx before it changed its name and relocated to San Francisco in 2006, the deal is an opportunity for a reboot after its lead anti-cancer drug missed its goal in a key clinical trial more than 18 months ago. Since then, Poniard has laid off most of its employees and its stock price has tumbled; the shares closed Wednesday at 19.15 cents.

For 6-year-old Allozyne, the deal is a chance to gain access to the public markets without the time, expense and disclosure of a traditional initial public offering.

Allozyne says it has raised $43 million in capital since its formation in late 2005; its backers include such big hitters as OVP Venture Partners, Arch Venture Partners and MPM Capital. The latter firm also is the largest shareholder in Poniard, with a 13.1 percent stake.

The company describes its lead drug candidate, AZ01, as a long-acting interferon that could allow multiple-sclerosis patients to receive treatment once a month, rather than weekly or twice weekly.

Meenu Chhabra, Allozyne's chief executive, said in a statement that "by merging with Poniard, we believe we can access the public capital markets to accelerate our strategic plan," which includes advancing AZ01 into Phase II clinical trials and developing other experimental treatments for autoimmune diseases.

Before the deal does through, Poniard shareholders must approve a previously announced reverse stock split to enable its shares to remain listed on Nasdaq.

The two companies hope to close the deal in the second half of this year. They said that holders of approximately 21 percent of Poniard's stock and 63 percent of Allozyne's stock already have agreed to vote in favor of the deal, and to not sell their shares in the combined company for at least six months.

Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com

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Posted: June 2011


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