Cytel Enters $20-Million Deal With Japanese Firm
Cytel Corp. announced Thursday a $20-million research and investment deal with Sumitomo Pharmaceuticals of Japan, as well as plans to hold an initial public stock offering that could raise as much as $42 million for the young biotechnology company.
Cytel is developing a series of drugs to combat diseases including rheumatoid arthritis, septic shock and hepatitis B. Founded in 1987, the company hopes to have its first drug in clinical trials by late 1992.
The deal with Sumitomo, a $1-billion drug company that sells products principally in the Far East, encompasses a $15-million collaborative research effort as well as a $5-million equity investment by Sumitomo in Cytel. The collaborative effort is targeting septic shock and cancer.
The initial public stock offering will involve the sale to the public of 3 million shares of newly issued Cytel shares priced between $14 and $12 each. Underwriters of the offering are Goldman, Sachs & Co., and Alex. Brown & Sons.
The Sumitomo deal is the second major corporate agreement signed by Cytel. In 1989, Cytel signed a $30-million pact with Sandoz Ltd. of Switzerland covering the development of certain drugs to treat auto-immune disorders and transplant rejection.
Co-founder and chairman of Cytel is Howard E. (Ted) Greene, who was also a co-founder and former chief executive of Hybritech, now an Eli Lilly unit. Leading Cytel shareholders are Sandoz, J.H. Whitney Ventures and Biovest Partners, the venture capital firm set up in San Diego by Greene and Timothy Wollaeger.
