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Brushing Off Clinical Setback, Cerulean Tees Up $75M IPO

Xconomy Boston — 

Cerulean Pharma whiffed on its first attempt to prove that a nanoparticle-based cancer drug its been developing could help terminally ill lung cancer patients live longer. Now the Cambridge, MA-based company is going public to get the financial backing to see if the drug has better luck treating other cancer types.

Cerulean aims to raise as much as $75 million through an IPO and list on the Nasdaq under the ticker symbol “CERU.” Leerink Partners, Canaccord Genuity, JMP Securities, and Wedbush Securities are underwriting the offering.

Cerulean has raised more than $80 million in equity financing since its inception in 2005. Polaris Partners, with a 32.3 percent stake, is the company’s biggest shareholder. Venrock (20.8 percent), Lilly Ventures (16.2 percent), Crown Ventures (10.9 percent), and Lux Capital (9.8 percent), also own large stakes in the company.

Cerulean was founded to commercialize a nanoparticle drug delivery technology developed at from MIT and Caltech that the company is using to administer anti-tumor drugs—the approach is similar to the one behind Celgene’s protein-bound version of paclitaxel (Abraxane). Cerulean’s lead drug candidate, CRLX101, is a cyclodextrin-based polymer linked to camptothecin, a chemotherapy agent. The concept is that CRLX101 is supposed to be small enough to slip through leaky holes in the blood vessels that feed tumors and deliver a toxin over a sustained period of time, all while being too large to get into healthy tissues. The experimental drug is designed to block the proteins topoisomerase 1 and HIF-1 alpha, which are implicated in the survival of cancer cells.

Cerulean began programs testing the drug in various cancer types, among them late-stage lung cancer that hadn’t responded to prior therapies. It charged into the deep end of the pool. Rather than looking at easier study goals like progression-free survival (how long a therapy prevents a tumor from spreading), Cerulean designed a Phase 2b study in terminally ill lung cancer patients for CRLX101 trying to see if the drug candidate could help them live longer.

The results, however, weren’t what Cerulean had hoped for. CRLX101 failed to meet the goal of extending patients’ lives in a Phase 2b study including 157 people in Russia and the Ukraine. Cerulean said at the time that the drug showed a “favorable safety profile,” however.

Cerulean plans to use much of the IPO cash to move ahead with other ongoing clinical trials in kidney, ovarian, and rectal cancers. The company had about $5.5 million in cash on hand at the end of the year, according to the IPO prospectus.

The company intends to start a Phase 2 trial later this year to test CRLX101 in tandem with Roche/Genentech’s bevacizumab (Avastin) in patients with kidney cancer. It’s already started a two-part mid-stage study testing the drug’s impact on ovarian cancer both as a monotherapy and in combination with bevacizumab, and is planning to start a Phase 2 trial of CRLX101, radiotherapy and capecitabine (Xeloda) in rectal cancer by the end of the year.