Prometheus Labs Updates its IPO Filing

8/12/10Follow @bvbigelow

San Diego-based Prometheus Laboratories, a specialty pharma and diagnostics company, has filed an amendment to its plans for an initial public offering, which has been in registration for nearly three years.

The regulatory filing offers a wealth of new insights into the company. Prometheus says it generated first-half profits of $28.9 million and $259.6 million in total revenue during the first half of 2010, according to its amended IPO filing. This represents a 60 percent increase in revenue and a 75 percent profit gain over the first half of 2009. The company reported total debt of more than $194 million as of June 30.

Prometheus also says its total annual revenue has grown from $138.9 million in 2005 to $341.9 million in 2009, according to the regulatory filing. Most of that revenue, however, has come from a relatively short list of drugs targeting gastrointestinal disorders or cancer. In 2009, Prometheus generated just $84.2 million, or 24.7 percent, of its overall revenue from diagnostic cancer and gastroenterology services.

In fact, the company has been generating most of its revenue from a single drug—budesonide, a treatment for moderate Crohn’s disease marketed as Entocort EC. During the first six months of this year, budesonide sales accounted for roughly 63 percent of the total sales at Prometheus—and 74 percent of its drug sales. Prometheus began selling budesonide capsules in 2005 under an exclusive rights agreement with AstraZeneca—which is set to expire at the end of this year. Two patents protecting the drug also are scheduled to expire in May 2011 and January 2015.

The company has been diversifying its product line. Prometheus says it bought the drug alosetron hydrochloride (Lotronex) for treating irritable bowel syndrome from GlaxoSmithKline in early 2009. Earlier this year, Prometheus acquired and began selling aldesleukin (Proleukin) for treating metastatic renal cell carcinoma and metastatic melanoma under an agreement with Novartis Vaccines and Diagnostics.

The company also launched a test for Crohn’s disease, saying it can predict a patient’s risk of developing the disease later in life. It also signed a deal in March with Bayer Schering Pharma AG, that could be worth as much as $160 million, to develop diagnostic tests for cancer drugs that Bayer has been developing.

The company, which had 476 employees in mid-July, has applied for a listing on the Nasdaq under the symbol RXDX. As part of a reorganization that will follow the IPO, Prometheus Labs plans to change its name to Prometheus RxDx. A report in VentureWire says Promethus has raised more than $132 million in debt and equity since it was founded in 1995. Its investors include DLJ Merchant Banking Partners, Split Rock Partners, Sprout Capital, Apax Partners, Pamlico Capital, and Brentwood Venture Capital.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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