Wednesday, July 25, 2007

Sucampo company in Bethesda is going public

Bethesda drug firm plans to raise $39M

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Sucampo Pharmaceuticals Inc., a Bethesda biopharma that collaborates with Japan's largest drug company, Takeda Pharmaceutical Co. Ltd., is going public.

The company, whose lead product treats bowel ailments, expects to raise $38.6 million in an initial public offering, according to its filing with the Securities and Exchange Commission.

Its SEC filing last week came just days after Sucampo applied for federal approval to market a lower dose of Amitiza, its drug for irritable bowel syndrome. The drug was approved by the Food and Drug Administration in January 2006 for treating chronic idiopathic constipation.

The company is offering more than 3 million shares at $14 to $16 per share. Shareholder R-Tech Ueno Ltd. is also selling 625,000 shares. The SEC filing indicated that the company intends to use cash to help develop and market Amitiza.

Sucampo was formed in 1996 by researchers Ryuji Ueno, chairman and CEO, and Sachiko Kuno. Last month, the husband-and-wife team was selected as Ernst & Young’s 2007 Life Sciences Entrepreneur of the Year for the Greater Washington, D.C., region.

Irritable bowel syndrome affects 58 million Americans, according to a company statement, with one-third of those cases involving chronic idiopathic constipation.

The company has an exclusive worldwide royalty-bearing license from Sucampo AG, a Swiss patent-holding company, to develop and commercialize Amitiza and other compounds classified as prostones. Sucampo’s pipeline is based on prostones, a class of compounds from certain fatty acids in the human body. Ueno has discovered therapeutic uses for prostones.

Sucampo's product royalty revenues for the second quarter were an estimated $9.5 million, up from $2.3 million the previous quarter, according to Sucampo information. The increase was due to marketing of Amitiza for constipation.

Its 2006 revenues were about $59 million, compared with $40 million in 2005. The figures reflect a consolidation of capital stock acquired by the U.S. company in September from affiliates Sucampo Europe and Sucampo Japan. The U.S. company became profitable in 2006 with a net income of $21 million, according to its financial reports.

Other stockholders include S&R Technology Holdings of Bethesda, with 67.2 percent of the shares; Ridgeway Capital Partners Ltd. of Tokyo, 4.8 percent; and Astellas Pharma Inc., also of Tokyo, 3 percent.

Sucampo has entered into an underwriting agreement for the IPO with Cowen and Co. LLC, CIBC World Markets Corp. and Leerink Swann & Co. Inc.

Kuno resigned as an executive officer and director on May 31. She is now working eight hours a week as the company’s adviser on international business development for $76,000, plus annual bonuses.

The company’s board also approved a one-time stock and cash award to Kuno and Ueno to be ‘‘settled immediately following this offering,” according to the SEC filing.

Company officials did not return calls seeking comment.

This report originally appeared in The Business Gazette.