Scottish biotech Cyclacel joins IPO bandwagon

Scottish cancer specialist Cyclacel has announced plans to float on Nasdaq and the London Stock Exchange.

Cyclacel -- long touted as a candidate for an initial public offering -- said it planned to offer 16 million new shares, or 26 percent of the company's enlarged share capital, at an indicative price of between 152 and 180 pence each.

At the midpoint of the price range, the offering would raise 26.6 million pounds and value the company at about 110 million pounds. This would represent around two years of cash resources, said Chief Executive Spiro Rombotis.

Cyclacel did not specify how many of the shares it would place in London and the United States.

Dundee-based Cyclacel said it would use the proceeds of its IPO to develop its clinical stage drugs and to advance its pre-clinical drug portfolio.

"We have the chance to be first to market in a massively important cancer field after Aventis unexpectedly terminated its development of a similar class of drug," said Rombotis.

"We have to float now so our shareholders can reap the rewards of being first to market." He added the company would not have launched an IPO without strong indications of demand.

Rombotis expects Cyclacel's lead drug, to treat a rare form of blood cancer, to reach market as early as 2006. Its second drug hope, for lung cancer, could follow 12-18 months later.

"On the basis that most of these blood cancer patients will die -- the chances are 80-90 percent -- we could have potential for fast-track status," he said.

Morgan Stanley and SG Cowen will act as joint global coordinators and bookrunners for the offering.

Cyclacel had discussed floating in 2003, but was put off by weak equity markets and poor sentiment towards new listings.