Ista to Offer Stock to Raise Eye Research Funds
Ista Pharmaceuticals Inc., which is developing treatments for eye afflictions, plans to raise as much as $86.3 million in an initial sale of stock to the public, according to regulatory documents filed Thursday.
The Irvine company, which warned that it has a history of losses and that it expects to incur more as it continues research and development, produces Vitrase, a treatment for diabetes-triggered, abnormal changes to optical blood vessels. The condition is the leading cause of adult blindness.
The product is in a pilot, second-stage clinical trial for treating the condition, and the third phase of clinical tests for treating vitreous hemorrhage, a sight-threatening condition that occurs when blood vessels in the eye’s retina rupture.
The product has received a “fast track” designation by the Food and Drug Administration, which usually means the agency will spend less time considering whether to approve the drug. The agency bestows the designation on products that appear to offer a significant benefit over other therapies.
The only other known options for dealing with vitreous hemorrhage are to wait and hope it will clear up on its own or to have surgery, the filing said.
The company, which doesn’t have any products available for sale yet, listed Vitrase as its lead product candidate.
Ista lost $14.3 million in 1999 and $9.7 million in 1998, according to the filing.
Vitrase is a proprietary formulation of a naturally occurring enzyme. The company warned that it gets its enzyme supply from New Zealand sheep and that there is no guarantee the supply will always be free of delays or disruption.
Ista’s backers include Allergan Inc., an Irvine-based producer of eye-care and specialty pharmaceutical products that has invested $10 million in the company.
Allergan, which has agreed to market Vitrase until April 2004 in all markets except Mexico, will split profits 50-50 with Ista on U.S. sales and pay Ista a royalty on any international sales.
The family of Gordon Gund, owner of the Cleveland Cavaliers National Basketball Association team, has also invested, the filing said. Gund, who is visually impaired, chairs The Foundation Fighting Blindness.
Ista started in 1992 as Advanced Corneal Systems. Edward H. Danse, 47, the company’s president and chief executive, previously held senior management positions at Allergan.
The company last month bought Visionex Pte Ltd., a Singapore corporation that was related to Ista through common ownership by some of Ista’s stockholders, the filing said. Visionex is testing Vitrase in Singapore.
Ista did not disclose the number of shares of common stock that it plans to sell, or the stock’s price range.
The company plans to spend the proceeds on clinical trials and preclinical research with a focus on Vitrase, for general corporate purposes and on the possible acquisition of complementary businesses, technologies or products.
CIBC World Markets will underwrite the stock sale with ING Barings and Prudential Vector Healthcare, the filing said.
The company wants to trade on the Nasdaq stock market under the symbol “ISTA.”
