Company Overview
| Company Name |
ARGOS THERAPEUTICS INC |
| Company Address |
4233 TECHNOLOGY DR
DURHAM, NC 27704 |
| Company Phone |
9192876300 |
| Company Website |
www.argostherapeutics.com |
| CEO |
Jeffrey D. Abbey |
| Employees (as of 1/31/2012) |
57 |
| State of Inc |
DE |
| Fiscal Year End |
12/31 |
| Status |
Withdrawn (7/29/2011) |
| Proposed Symbol |
-- |
| Exchange |
Nasdaq National Market |
| Share Price |
13.00-15.00 |
| Shares Offered |
5,250,000 |
| Offer Amount |
$90,562,500.00 |
| Total Expenses |
$2,550,000.00 |
| Shares Over Alloted |
787,500 |
| Shareholder Shares Offered |
-- |
| Shares Outstanding |
15,371,196 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
-- |
| Quiet Period Expiration |
-- |
| CIK |
0001105533 |
We estimate that the net proceeds from our issuance and sale of 5,250,000
shares of our common stock in this offering will be approximately $65.8
million, assuming an initial public offering price of $14.00 per share after
deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us. If the underwriters exercise their over-
allotment option in full, we estimate that the net proceeds from this offering
will be approximately $76.1 million.
A $1.00 increase (decrease) in the assumed initial public offering price of
$14.00 per share would increase (decrease) the net proceeds from this offering
by approximately $4.9 million, assuming that the number of shares offered by
us remains the same and after deducting the estimated underwriting discounts
and commissions and estimated offering expenses payable by us.
We intend to devote approximately $30 million of the net proceeds from this
offering to fund direct costs of our planned pivotal phase 3 combination
therapy clinical trial of AGS-003 and to use the balance to fund working
capital and other general corporate purposes, including our research and
development, general and administrative and other operating expenses. We also
will use $200,000 of the net proceeds to pay a success fee to a former lender
under a loan agreement that we have previously repaid in full.
This expected use of the net proceeds from this offering and our existing cash
and cash equivalents represents our intentions based upon our current plans and
business conditions. The amounts and timing of our actual expenditures may vary
significantly depending on numerous factors, including the progress of our
development and commercialization efforts, the status of and results from
clinical trials, as well as any collaborations that we may enter into with
third parties for our product candidates, and any unforeseen cash needs. As a
result, our management will retain broad discretion over the allocation of the
net proceeds from this offering. We have no current understandings, agreements
or commitments for any material acquisitions or licenses of any products,
businesses or technologies.
We do not expect that the net proceeds from this offering will be sufficient to
enable us to complete our planned pivotal phase 3 clinical trial of AGS-003 in
combination with sunitinib. However, we believe that these net proceeds will
be sufficient to enable us to obtain data from the trial regarding the potency
of the immune responses generated by the combination of AGS-003 and sunitinib
as measured by the percentage expansion or proliferation of CD8+ central and
effector memory T-cells, which we expect to obtain in mid-2014. It is possible
that we will not achieve the progress that we expect in our planned pivotal
phase 3 clinical trial of AGS-003 in combination with sunitinib because the
actual costs and timing of development, particularly clinical trials, are
difficult to predict and subject to substantial risks and delays including
slower than anticipated patient enrollment. We also do not expect that the net
proceeds from this offering will be sufficient to enable us to fund our planned
leasing, build-out and equipping of a new U.S. commercial manufacturing
facility, which we will need to have completed in order to submit to the FDA a
BLA for AGS-003 and to manufacture AGS-003 or any of our Arcelis-based products
on a commercial scale.
Pending our use of the net proceeds from this offering, we intend to invest
the net proceeds in a variety of capital preservation investments, including
short-term, investment grade, interest bearing instruments and U.S. government
securities.
The biotechnology and pharmaceutical industries are highly competitive. There
are many pharmaceutical companies, biotechnology companies, public and private
universities and research organizations actively engaged in the research and
development of products that may be similar to or competitive with our
products. There are a number of multinational pharmaceutical companies and
large biotechnology companies currently marketing or pursuing the development
of products or product candidates targeting the same indications as our product
candidates. It is probable that the number of companies seeking to develop
products and therapies for the treatment of unmet needs in these indications
will increase. Some of these competitive products and therapies are based on
scientific approaches that are the same as or similar to our approaches, and
others are based on entirely different approaches.
Many of our competitors, either alone or with their strategic partners, have
substantially greater financial, technical and human resources than we do and
significantly greater experience in the discovery and development of product
candidates, obtaining FDA and other regulatory approvals of products and the
commercialization of those products. Accordingly, our competitors may be more
successful than we may be in obtaining approval for drugs and achieving
widespread market acceptance. Our competitors’ drugs may be more effective, or
more effectively marketed and sold, than any drug we may commercialize and may
render our product candidates obsolete or non-competitive before we can recover
the expenses of developing and commercializing any of our product candidates.
We anticipate that we will face intense and increasing competition as new drugs
enter the market and advanced technologies become available. We expect any
products that we develop and commercialize to compete on the basis of, among
other things, efficacy, safety, convenience of administration and delivery,
price, the level of generic competition and the availability of reimbursement
from government and other third-party payors.
mRCC
Historically, mRCC was treated with chemotherapy, radiation and hormonal
therapies, as well as cytokine-based therapies such as interferon- a and IL-2.
More recently, the FDA has approved several new agents as monotherapies for
mRCC, including Nexavar, marketed by Bayer Healthcare Pharmaceuticals, Inc. and
Onyx Pharmaceuticals, Inc., Sutent and Inlyta, marketed by Pfizer, Inc.,
Avastin, marketed by Genentech, Inc., a member of the Roche Group, and
Votrient, marketed by GlaxoSmithKline. Other recently approved agents for the
treatment of mRCC are Torisel, marketed by Pfizer, and Afinitor, marketed by
Novartis Pharmaceuticals Corporation. In addition, there are product candidates
in late-stage clinical development for the treatment of mRCC, such as
tivozanib. We believe that each of these existing therapies has efficacy or
safety limitations and, as a result, that there remains an unmet need for novel
therapeutic approaches for mRCC that can improve efficacy without adding
appreciable toxicity. We believe that the safety profile that AGS-003 has
demonstrated to date, which may enable it to be used in combination with these
therapies with little or no additional toxicities, gives AGS-003 the potential
to address this unmet need. Accordingly, existing therapies with which AGS-003
would be used as part of a combination would not be competitive with AGS-003.
However, a standalone therapy for mRCC that demonstrated improved efficacy over
currently marketed therapies with a favorable safety profile and without the
need for combination therapy might pose a significant competitive threat to
AGS-003.
Immatics Biotechnologies GmbH is developing a therapeutic cancer vaccine,
IMA-901, which is a mixture of defined tumor-associated peptides, for the
treatment of RCC. Immatics is conducting a pivotal phase 3 clinical trial
comparing IMA-901 in combination with sunitinib against sunitinib alone in a
subset of favorable and intermediate risk patients. If this clinical trial is
successful, IMA-901 and sunitinib combination therapy would be in direct
competition with AGS-003 and sunitinib combination therapy. Immatics could have
a competitive advantage if it is able to introduce its product to the market
before the time, if any, at which we receive marketing approval for AGS-003.
We estimate that there are numerous other cancer immunotherapy products in
clinical development by many public and private biotechnology and
pharmaceutical companies targeting numerous different cancer types. A number of
these product candidates are in late-stage clinical development.
HIV
There are numerous FDA-approved treatments for HIV, primarily antiretroviral
therapies, marketed by large pharmaceutical companies. In addition, generic
competition has recently developed as patent exclusivity periods for older
drugs have expired, with more than 15 generic bioequivalents currently on the
market. The presence of these generic drugs is resulting in price pressure in
the HIV therapeutics market.
Lupus
Several biopharmaceutical companies are marketing or developing products for
the treatment of lupus. In March 2011, the FDA approved Benlysta (belimumab)
for marketing by Human Genome Sciences, Inc. and GlaxoSmithKline for the
treatment of lupus. Two other monoclonal antibodies that employ a similar
mechanism of action as AGS-009, Genentech’s rontalizumab and Medimmune, Inc.’s
sifalimumab, are currently in phase 2 clinical trials.
Organ and Tissue Transplantation
The standard of care for immunosuppression in organ and tissue transplantation
is cyclosporine, which is marketed as a generic by a number of manufacturers.
The FDA has approved numerous other therapies for the prophylaxis of transplant
rejection, and several more are in clinical development.
Company Description
We are a biopharmaceutical company focused on the development and
commercialization of fully personalized immunotherapies for the treatment of
cancer and infectious diseases based on our proprietary technology platform
called Arcelis TM. Using biological components obtained from each patient, our
Arcelis-based immunotherapies employ a specialized white blood cell, called a
dendritic cell, to activate an immune response that is specific to the
patient’s disease. Our most advanced product candidate is AGS-003 for the
treatment of metastatic renal cell carcinoma, or mRCC. We plan to initiate a
pivotal phase 3 clinical trial of AGS-003 in combination with sunitinib, an
oral small molecule drug marketed under the trade name Sutent® that is the
current standard of care for first-line treatment of mRCC, in the second
quarter of 2012.
Renal cell carcinoma, or RCC, is the most common type of kidney cancer.
According to the National Cancer Institute, there are approximately 61,000 new
cases of kidney cancer each year in the United States. The National
Comprehensive Cancer Network and the National Cancer Data Base, or NCDB,
estimate that 90% of these new cases are RCC. According to the NCDB, 15% to 20%
of these newly diagnosed RCC cases are mRCC. Additionally, patients initially
diagnosed with early stage RCC may later present with mRCC.
We are also developing a second Arcelis-based product candidate, AGS-004 for
the treatment of HIV. We are studying AGS-004 in a phase 2b clinical trial that
is funded entirely by the National Institutes of Health, or NIH. In addition to
our Arcelis-based product candidates, we are developing two other product
candidates based on our expertise in dendritic cell biology: AGS-009, a
monoclonal antibody for the treatment of lupus, which we are studying in a
phase 1a clinical trial, and AGS-010, a preclinical biologic compound, which we
are developing for organ and tissue transplantation and the treatment of
autoimmune and inflammatory diseases.
Arcelis Technology Platform
We use our Arcelis platform to generate RNA-loaded dendritic cell
immunotherapies using biological components derived from the individual patient
to be treated. Specifically, we manufacture these personalized therapies using
that patient’s disease sample, either tumor cells in the case of cancer or a
blood sample containing virus in the case of infectious disease, and dendritic
cells derived from the patient’s white blood cells. By using messenger RNA, or
mRNA, from the patient’s own cancer cells or virus, our Arcelis platform yields
a fully personalized immunotherapy that is designed to contain all of the
patient’s disease-specific antigens and to elicit a rapid, broad and potent
immune response that is specific to the patient’s own disease. Our Arcelis-
based immunotherapies have been well tolerated in clinical trials in more than
100 patients with no serious adverse events attributed to our immunotherapies.
We believe that our Arcelis platform can be used for a wide range of oncology
and infectious disease indications.
In October 2011, one of our scientific co-founders, Ralph M. Steinman, M.D.,
was awarded the Nobel Prize in medicine for the discovery of dendritic cells as
critical sentinels of the immune system. Dr. Steinman’s discovery of dendritic
cells and his research of dendritic cell biology and the role of dendritic
cells in adaptive immunity led to the development of our Arcelis platform.
Our Development Programs
The following table summarizes our four development programs and their status.
We currently hold all commercial rights to all four of these programs in all
geographies.
Product
Candidate Description Primary Indication Status
AGS-003 Arcelis-based fully mRCC Planned pivotal phase 3 trial
personalized immunotherapy with initiation expected in
the second quarter of 2012
AGS-004 Arcelis-based fully HIV Ongoing phase 2b trial with
personalized immunotherapy completion of enrollment
expected in the second half of 2012
AGS-009 Anti-interferon- a monoclonal Lupus Ongoing phase 1a trial with results
antibody expected in the second quarter of 2012
AGS-010 CD83 recombinant protein Organ and tissue Preclinical
transplantation
AGS-003. We have tested AGS-003 in clinical trials in combination with
sunitinib and as a monotherapy for the treatment of mRCC. In our phase 2
clinical trial of AGS-003 in combination with sunitinib, we evaluated the
combination therapy in intermediate and poor risk patients who had a time from
diagnosis to initiation of systemic therapeutic treatment of less than one
year. Based on overall survival data from our phase 2 clinical trial as of
February 4, 2012, median overall survival for patients in the trial is
estimated to be 29.3 months. This overall survival result was calculated using
a Kaplan-Meier analysis, which is a widely used statistical method of
predicting survival rates. Data from the International Metastatic Renal Cell
Carcinoma Database Consortium, or the Consortium, show that 856 intermediate
and poor risk patients who had a time from diagnosis to initiation of systemic
therapeutic treatment of less than one year and were treated with sunitinib
achieved a median overall survival of only 14.9 months. The Consortium is a
global consortium of 14 recognized medical institutions that is collecting data
on the treatment of mRCC and, as of November 2011, had collected data with
respect to the treatment of 2,106 mRCC patients. Overall survival is the length
of time that passes from the initiation of treatment to death.
We plan to conduct a pivotal phase 3 clinical trial of AGS-003 in combination
with sunitinib compared to sunitinib monotherapy under a special protocol
assessment, or SPA, with the Food and Drug Administration, or FDA. A pivotal
clinical trial is a trial in humans that is intended to collect the primary
evidence of safety and effectiveness to support a filing for marketing
approval. Under the protocol for the trial, the primary endpoint for the trial
is overall survival. In order to achieve the primary endpoint of the trial, the
data must demonstrate an increase of approximately six months in median overall
survival for the AGS-003 plus sunitinib arm compared to the sunitinib
monotherapy control arm. We expect to initiate the trial by activating sites
for enrollment beginning in the second quarter of 2012, complete enrollment in
late 2013 and have final overall survival data in the second half of 2015 if we
are successful in enrolling patients on our planned schedule. In addition, we
expect to have data regarding the potency of the immune responses generated by
the combination of AGS-003 and sunitinib as measured by the percentage
expansion or proliferation of CD8+ central and effector memory T-cells in mid-
2014. CD8+ central and effector memory T-cells are a special kind of cytotoxic
T lymphocytes, or T-cells, which are the cells responsible for killing the
cancer cells. These T-cells are known to be associated with good clinical
outcomes, are long-lived and provide durable immune responses. In our phase 2
clinical trial of AGS-003 in combination with sunitinib, we observed a
correlation between the increase in percentage expansion or proliferation of
CD8+ central and effector memory T-cells and prolonged overall survival.
In February 2012, we received a letter from the FDA advising us that the FDA
had completed its review of our protocol for the pivotal phase 3 clinical trial
under the SPA process. In the letter, the FDA stated that it had determined
that the protocol sufficiently addressed the trial’s objectives and that the
trial was adequately designed to provide the necessary data to support a
submission for marketing approval. The FDA noted that the ability of the trial
to support an efficacy claim for AGS-003 would depend on a review of the data
from the trial and an evaluation of the overall risk and benefit of AGS-003.
AGS-004. We have completed two early stage clinical trials of AGS-004, and
are currently conducting a phase 2b clinical trial that is funded entirely by
the NIH. We expect to complete enrollment in this trial in the second half of
2012 and to complete primary endpoint analysis of the data from this trial in
mid-2013. According to the World Health Organization, the number of people
living with HIV in the world was approximately 33.3 million in 2009. The Henry
J. Kaiser Family Foundation estimates that more than 1.1 million people are
currently living with HIV in the United States. According to the Centers for
Disease Control and Prevention, the number of new cases of HIV infection in the
United States is expected to remain steady at about 55,000 cases per year for
the next decade.
AGS-009 and AGS-010. We are developing our other two product candidates
based on our expertise in dendritic cell biology. We have completed enrollment
in a phase 1a clinical trial of AGS-009, a monoclonal antibody for the
treatment of lupus, and expect the results of this trial to be available in the
second quarter of 2012. We are continuing preclinical testing on AGS-010, a
recombinant human soluble CD83 protein, for organ and tissue transplantation
and the treatment of autoimmune and inflammatory diseases.
Manufacturing
We currently manufacture our Arcelis-based product candidates at our single,
centralized manufacturing facility located in Durham, North Carolina. To
prepare for the commercial launch of AGS-003 and any other Arcelis-based
products we develop, we plan to establish automated manufacturing processes
based on existing functioning prototypes of automated devices and disposables
and to identify, lease, build out and equip a new U.S. commercial manufacturing
facility for this purpose. We have developed proprietary processes to generate
Arcelis-based products that we believe will allow us to manufacture the drug
product for all of North America at this one centralized facility. Our plan is
to file our biologics license application, or BLA, for AGS-003 with the FDA
using the automated manufacturing processes that we establish. We rely on
contract manufacturers for the production of AGS-009 and AGS-010 and do not
plan to build our own manufacturing capacity for these product candidates.
Intellectual Property
We own or exclusively license six U.S. patents and 18 U.S. patent applications,
as well as more than 100 foreign counterparts to various of these patents and
patent applications. The patents and patent applications we have exclusively
licensed include patents and patent applications related to our Arcelis-based
products that we have licensed under a patent license agreement with Duke
University and patents and patent applications related to AGS-009 that we have
licensed under patent license agreements with the Baylor Research Institute.
-----
We were incorporated under the laws of the State of Delaware in 1997 under the
name Dendritix, Inc. We changed our name to Merix Bioscience, Inc. in 1999, and
to Argos Therapeutics, Inc. in 2004.
Our executive offices are located at 4233 Technology Drive, Durham, North
Carolina 27704, and our telephone number is (919) 287-6300. Our website address
is www.argostherapeutics.com.
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