Xcyte Therapeutics Scales Back IPO

[Guest guest]

[This is the company which has their 'Xcellerated' T-cell therapy in

trials for CLL and multiple myeloma.]

Xcyte aiming for scaled-back IPO

By Luke Timmerman

Seattle Times business reporter

Xcyte Therapies took another step yesterday toward going public, but

the process hasn't gone entirely according to plan: The company has

scaled back its initial goal of raising $75 million and separated

from its lead underwriter.

The Seattle biotech company said yesterday in an updated IPO

prospectus that it hopes to offer 4 million shares to investors at

$13 to $15 apiece, which could raise $60 million. The filing also

makes no mention of UBS Investment Bank, which was listed as the

company's lead underwriter when its IPO plans were unveiled in

October.

The offering is being led by Piper Jaffrey, with Wells Fargo

Securities, RBC Capital Markets and JMP Securities now assisting.

Xcyte Chief Executive Ron Berenson would not comment on the change.

The climate for biotech IPOs has begun to improve in the past month.

Four biotechs have gone public (Eyetech Pharmaceuticals, GTx, Renovis

and Corgentech), and all except GTx saw their stock prices surge in

the opening weeks. The four also had other things in common: top-tier

Wall Street underwriters and products that investors are demanding —

drugs that have shown signs of effectiveness and have a chance to

reach the market within several years.

Xcyte Therapies

Xcyte, by comparison, plans to enter a mid-stage trial for non-

Hodgkin's lymphoma in the first half of this year and has ongoing

trials in the early-to-middle stages for a pair of blood cancers,

chronic lymphocytic leukemia and multiple myeloma. Its technology

tries to charge T-cells of the immune system outside the body then re-

infuse them to attack cancers, infectious diseases, and medical

conditions linked to weakened immune systems.

The company is one of 13 biotech companies competing for investor

support to go public, according to Signals, an online biotechnology

magazine.

" The appetite from investors is definitely there, as you've seen from

the recent IPOs, but the bubbly enthusiasm of 2000 isn't there, " said

Van Brunt, editor of Signals. " The question is: Will early

stage companies have a chance? We don't know yet. "

Xcyte appears to have strong pressures to make the IPO jump. It has

tried to go public once before — in 2000 and 2001 — before it backed

off when the market soured.

Plus, the company had $13.5 million in cash on hand at year's end,

enough to keep running at its current spending rate at least through

October, and it has about $15 million in liabilities, most of which

would go away by being converted into stock if it completes the IPO.

If the company can raise the $60 million, it could have enough cash

to get through the second quarter of 2005, the filing says.